Insert appropriate Broker/Dealer disclosure here Genworth Financial Wealth Management, Inc. © 2010 NAVIGATING VOLATILE MARKETS Lighthouse Restaurant May

Insert appropriate Broker/Dealer disclosure here Genworth Financial Wealth Management, Inc. © 2010

NAVIGATING VOLATILE MARKETS

Lighthouse RestaurantMay 26, 2011

Securities & Investment Advisory Services offered through FSC Securities Corp, Member FINRA/SIPC and a Registered Investment Advisor. Dluzak & Associates is not affiliated with FSC Securities Corp or registered as a broker-dealer or investment advisor.389 2010/08


Today’s Discussion

Your Recent Investment Experiences

The “Rules of Investing”

Six Step Process For Navigating Any Market

2



Please list two or three words to describe your feelings when thinking about your investment experiences over the past three years.



How has your ability to experience volatility and losses in your portfolio changed in the last 36 months?



In the past three years, what have you learned about yourself as an investor?


How has your ability to make confident investment decisions changed recently?

What do you need in order to increase your confidence when making future investment decisions?







7



1. 1. Asset Allocation

2. 2. Diversification

3. 3. Growth of A Dollar

4. 4. Buy and Hold


Asset Allocation•Asset Allocation is responsible for over 90% of the variance in portfolio performance.

91.5% Asset Allocation

4.6% Securities Selection

1.8% Timing

2.1% Other Factors

Asset allocation cannot eliminate the risk of fluctuating prices and uncertain return.

Brinson, Hood & Beebower, Financial Analysts Journal, 1986

Brinson, Singer & Beebower, Financial Analysts Journal, 1991


Diversification

Annual Returns of Asset Classes shown are based on Indices disclosed on the next slide.Past performance is not indicative of future performance.


DisclosureFor the asset class performance chart on Page 9, the following is a list of the indices used and a brief definition:• US Growth: Russell 3000 Growth Index – an unmanaged index consisting of those companies in the Russell 3000 Index with higher than

average price-to-book ratios and forecasted growth values.• US Value: Russell 3000 Value Index - an unmanaged index consisting of those companies in the Russell 3000 Index with lower than average

price-to-book ratios and forecasted growth values.• US Large Cap: Russell 1000 Index - an unmanaged index consisting of those companies considered to represent the large-cap segment of the

U.S. equity market. It is a subset of the Russell 3000 Index based on market capitalization.• US Small Cap: Russell 2000 Index - an unmanaged index consisting of those companies considered to represent the small-cap segment of the

U.S. equity market. It is a subset of the Russell 3000 Index based on market capitalization.• International Equity: The Morgan Stanley Capital International (MSCI) Europe, Australia and Far East Index (MSCI EAFE) - an unmanaged

index holding approximately 1,000 companies traded on 20 stock exchanges from around the world, excluding the U.S.A., Canada, and Latin America.

• Emerging Markets Equity: MSCI Emerging Markets Index - a free float-adjusted market capitalization index from countries considered to represent emerging markets.

• US Fixed Income: Barclays Capital U.S. Aggregate Index - the index covers the USD-denominated, investment-grade, fixed-rate, taxable bond market of SEC-registered securities. The index includes bonds from the Treasury, Government-Related, Corporate, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS sectors. U.S. Agency Hybrid Adjustable Rate Mortgage (ARM) securities were added to the U.S. Aggregate Index on April 1, 2007.

• International Fixed Income: Barclays Capital Global ex Treasury Bond Index – a subgroup of the Lehman Global Index. All issues in the Lehman Global Index must be fixed rate, nonconvertible debt and have at least one year remaining to maturity. Securities from countries classified as emerging markets are excluded.

• US Real Estate: FTSE Nareit Equity Index - a broad measure of the performance of publicly traded real estate securities, such as Real Estate Investment Trusts (REITs) and Real Estate Operating Companies.

• Commodities: Dow UBS Commodity Index – the index is composed of futures contracts of 19 physical commodities traded on U.S. exchanges, with the exception of aluminum, nickel and zinc, which trade on the London Metal Exchange (LME). The component weightings are also determined by several rules designed to insure diversified commodity exposure.

• Market Neutral: HFRI Equity Market Neutral Index – the index reflects hedge fund industry performance by constructing equally weighted composites of constituent funds, as reported by the hedge fund managers listed within the HFR Database. Equity Market Neutral strategies employ sophisticated quantitative

• techniques of analyzing price data to ascertain information about future price movement and relationships between securities, select securities for purchase and sale. Equity Market Neutral Strategies typically maintain characteristic net equity market exposure no greater than 10% long or short.

• Cash: Citigroup 3 month T-bill - an unmanaged index of three-month Treasury bills.


4Q/2

54Q

/27

4Q/2

94Q

/31

4Q/3

34Q

/35

4Q/3

74Q

/39

4Q/4

14Q

/43

4Q/4

54Q

/47

4Q/4

94Q

/51

4Q/5

34Q

/55

4Q/5

74Q

/59

4Q/6

14Q

/63

4Q/6

54Q

/67

4Q/6

94Q

/71

4Q/7

34Q

/75

4Q/7

74Q

/79

4Q/8

14Q

/83

4Q/8

54Q

/87

4Q/8

94Q

/91

4Q/9

34Q

/95

4Q/9

74Q

/99

4Q/0

14Q

/03

4Q/0

54Q

/07

4Q/0

9

$0

$1

$10

$100

$1,000

$10,000

$100,000

CPI Int Gov

S&P 500 Small Co

T-Bills

Growth of A Dollar

Copyright ® Ibbotson Associates. Small company stocks are more volatile than large company stocks. U.S. Treasury Bills are guaranteed as to the timely payment of principal and interest. Small Company Stocks are represented by the fifth capitalization quintile of stocks on the NYSE. Large Company Stocks are represented by the S&P 500. Government Bonds are represented by 20-year U.S. Government Bond. Treasury Bills are represented by 30-day U.S. Treasury Bill. Inflation is represented using the Consumer Price Index. Past performance is not indicative of future performance.

1/1/1926 - 12/31/2009


Buy And HoldThe Effects of Staying Invested vs. Missing Top-Performing Day for Domestic Stocks- 1980 to 2009

The hypothetical example assumes an investment that tracks the returns of the S&P 500® Index and excludes dividend reinvestment which would lead to higher values but does not reflect the impact of taxes which would lower these figures. There is volatility in the market and a sale at any point in time could result in a gain or loss. Your own investment experience will differ, including the possibility of losing money. You cannot invest directly in an index. Past performance is not indicative of future performance.

Source: Genworth Financial Wealth Management, Inc.

Va

lue

of

$1

0,0

00

In

vest

me

nt

1/1

/19

80

– 1

2/3

1/2

00

9



•How have your perspectives or beliefs regarding the “rules of investing” changed in the past three years?






4. 4. Buy and Hold

5. 5. Secular Stock Market Regimes


Alternating Secular Bear and Bull Markets• DOW JONES INDUSTRIAL AVERAGE: 1906 – 2009

Used with permission by Ned Davis Research. For more information please visit, www.ndr.com

The Dow Jones Industrial Average ("Dow"), a registered trademark of Dow Jones & Co., Inc., is an unmanaged index composed of 30 common stocks.

Past performance is no guarantee of future results. It is not possible to invest directly in an index. Returns shown above do not reflect the reinvestment of dividends or other distributions; these total return figures are not available for the Dow prior to October 1987. Returns shown represent only the price appreciation of the index. With the inclusion of dividends in the data, performance of the index would be better than the performance shown. Vertical Axis is the value of the Dow.

1906 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009

10.00

100.00

1,000.00

10,000.00


Sailing

• Secular Bull Markets are “SAILING” markets, where the prevailing economic winds are the prime driver of returns

– Objective: Capture Participation

17




The Dow Jones Industrial Average (a registered trademark of Dow Jones & Co., Inc) is an unmanaged index composed of 30 common stocks.

Past performance is no guarantee of future results. It is not possible to invest directly in an index. Returns shown above do not reflect the reinvestment of dividends or other distributions, and represent only the price appreciation of the index. With the inclusion of dividends in the data, performance of the index would be better than the performance shown. Vertical Axis is the value of the Dow Jones Industrial Average.

1906 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009

10.00

100.00

1,000.00

10,000.00


Rowing

• Secular Bear Markets are “ROWING” markets, in which headwinds require considerable skill and work in search of value

– Objective: Deliver Competitive Returns Minimize Market Risk

19






1906 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009

10.00

100.00

1,000.00

10,000.00

1/14/2000-12/31/2009

BEAR

1906-1921

15.5 Years

-15.31%

-1.06%

BEAR

1929-1942

12.5 Years

-75.62%

-10.55%

BULL

1921-1929

8 Years

496.51%

24.9%

BEAR

1966-1982

16.5 Years

-21.93%

-1.49%

BULL

1942-1966

24 Years

970.98%

10.47%

BEAR

9+

-11.0%

-1.2%

BULL

1982-2000

17.5 Years

1408.9%

16.84%

Market Regime

Dates

Length in Years

Cumulative Return

Annualized Return

http://www.ndr.com/


Cyclical Markets Within Secular Markets• DOW JONES INDUSTRIAL AVERAGE: 1966 – 1982




572

594

618

642

668

694

722

750

780

811

843

877

911

947

985

1024

1065

572

594

618

642

668

694

722

750

780

811

843

877

911

947

985

1024

1065

Total Change Over Secular Bear: -21.9%Total Chart Length: 16.44 Years

1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

-25.2% -35.9% -16.1% -45.1% -26.9% -16.4% -24.1%32.4% 50.6% 31.8% 75.7% 22.3% 34.9%

Bear Bear Bear Bear Bear Bear BearBull Bull Bull Bull Bull Bull

0.65years

1.47years

0.57years

1.90years

1.43years

1.61years

1.29years

2.15years

0.92years

1.13years

1.79years

0.52years

1.01years

32.4%2.15 Years

34.9%1.01 Years

75.7%1.79 Years


S&P 500 Index Positive and Negative Days

Used With Permission: Crestmont Research, www.crestmontresearch.com

The S&P 500 (a registered trademark of the McGraw Hill Companies) is an unmanaged basket of 500 stocks that are considered to be widely held and thus believed to be a good indicator of overall market performance. This index of common stocks is weighted by market value. Past performance is not indicative of future performance.


Cyclical Markets Within Secular Markets• DOW JONES INDUSTRIAL AVERAGE: 1966 – 1982




57259461864266869472275078081184387791194798510241065

57259461864266869472275078081184387791194798510241065

1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

-25.2% -35.9% -16.1% -45.1% -26.9% -16.4% -24.1%32.4% 50.6% 31.8% 75.7% 22.3% 34.9%

Bear Bear Bear Bear Bear Bear BearBull Bull Bull Bull Bull Bull

0.65years

1.47years

0.57years

1.90years

1.43years

1.61years

1.29years

2.15years

0.92years

1.13years

1.79years

0.52years

1.01years

Total Change Over Secular Bear: -21.9 %Total Chart Length: 16.44 Years

Total Change Over Secular Bear -21.9%Total Chart Length: 16.44 Years


Sailing vs Rowing

We believe the reason that many investors have experienced substantial losses in their investment

strategies recently is that they are primarily following the “sailing” strategies of the great bull market of the

80’s and 90’s, when they should be including a component of “rowing” strategies in the more volatile

and challenging markets of this decade.

24






4. 4. Buy and Hold

5. 5. Secular Stock Market Regimes

6. 6. Asset Allocation Approaches


Four Approaches to Asset Allocation

Strategic

AbsoluteReturn

TacticalUnconstrainedSM

TacticalConstrained SM


Return DriversExtent to which returns are driven by market exposure or allocation decisions.

Strategic • Tactical ConstrainedSM

• Tactical UnconstrainedSM • Absolute Return

These are based on general objectives of these approaches. Your specific investment strategy, which takes into account your risk profile, may vary. There is no guarantee that a portfolio will behave in the manner indicated.


Upside CaptureLikelihood to participate in the gains of a rising market.



These dials indicate how a portfolio using one of the four allocation approaches might be expected to behave. These are based on general objectives of these approaches. Your specific investment strategy, which takes into account your risk profile, may vary. There is no guarantee that a portfolio will behave in the manner indicated.


Downside Capture



Likelihood to participate in the losses of a declining market.

These dials indicate how a portfolio using one of the four allocation approaches might be expected to behave. These are based on general objectives of these approaches. Your specific investment strategy, which takes into account your risk profile, may vary. There is no guarantee that a portfolio will behave in the manner indicated.


Tax ImpactLikelihood of producing more frequent taxable transactions.





Allocation FlexibilityDegree and frequency of allocation shifts for short to intermediate term opportunities.





Alternative VehiclesDegree to which the strategy may use alternative vehicles or strategies in pursuit of its objectives.





Four Approaches to Asset Allocation

Strategic

AbsoluteReturn

TacticalUnconstrainedSM

TacticalConstrained SM



Six Step Process For Navigating The Markets



34


Six Step Process


Discovery

• Goals and Objectives• Risk Tolerance • Time Horizon• Cash Flow• Investment Experience• Needs, Dreams & Legacies

36


Market Outlook• DOW JONES INDUSTRIAL AVERAGE: 1906 – 2009


The Dow Jones Industrial Average (a registered trademark of Dow Jones & Co., Inc) is an unmanaged index composed of 30 common stocks.

Past performance is no guarantee of future results. It is not possible to invest directly in an index. Returns shown above do not reflect the reinvestment of dividends or other distributions, and represent only the price appreciation of the index. With the inclusion of dividends in the data, performance of the index would be better than the performance shown. Vertical Axis is the value of the Dow Jones Industrial Average.

1906 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009

10.00

100.00

1,000.00

10,000.00

1/14/2000-12/31/2009

BEAR

1906-1921

15.5 Years

-15.31%

-1.06%

BEAR

1929-1942

12.5 Years

-75.62%

-10.55%

BULL

1921-1929

8 Years

496.51%

24.9%

BEAR

1966-1982

16.5 Years

-21.93%

-1.49%

BULL

1942-1966

24 Years

970.98%

10.47%

BEAR

9+

-11.0%

-1.2%

BULL

1982-2000

17.5 Years

1408.9%

16.84%

Market Regime

Dates

Length in Years

Cumulative Return

Annualized Return


Asset Allocation Approach

0%

Strategic Tactical ConstrainedSM

Tactical UnconstrainedSM Absolute Return

0%

0%

0%



100%



0%

0%

0%



30%



60%

0%

10%


Portfolio Strategists

Callan Associates

New Frontier

Avatar

Goldman Sachs

GFAM

J.P.Morgan

Litman/Gregory

State Street

Eaton Vance

GFAM

Rochdale

Stadion

Avatar

Eaton Vance

GFAM

J.P.Morgan

Strategic

Absolute Return

Tactical ConstrainedSM

Tactical UnconstrainedSM


2%Cash

60%Equity

38%FixedIncome

5%Cash

70%Equity

25%FixedIncome

2%Cash

60%Equity

38%FixedIncome

Rebalancing And Reallocating

Rebalancing aims to return your asset allocation to its optimum policy mix.

This chart is for illustrative purposes only. A client’s allocation will be based on their own individual needs.

42


2%Cash

60%Equity

38%FixedIncome

2%Cash

60%Equity

38%FixedIncome

5%Cash

70%Equity

25%FixedIncome

2%Cash

60%Equity

38%FixedIncome

15%Cash

35%Equity

50%FixedIncome

Rebalancing And Reallocating

Reallocations intend to capture opportunities or minimize potential risks.

This chart is for illustrative purposes only. A client’s allocation will be based on their own individual needs.

43


Reporting and Monitoring


Six Step Process


In Review




46


What Next?

Schedule A Meeting• Discovery or “Re-Discovery”• Discuss the current market environment• Analyze your current approach to asset allocation


Important Information• Fees and charges vary for these services. There may be additional fees and

expenses separate from the Genworth Financial Wealth Management’s fees or charges associated with the mutual funds and ETF’s held in the various investment strategies. You can obtain the applicable Disclosure Brochure, (Schedule H or Form ADV Part II) for complete information on all applicable fees from your Financial Advisor.

FSC Securities Corporation is not affiliated with Genworth Financial Wealth

Management, Inc.


Dluzak & Associates, Inc.

• Marijo Dluzak, CLU, Certified Financial Planner• Dluzak & Associates, Inc.

• 285 W 80th Place• Merrillville, IN 46410

• 1-888-755-PLAN (7526)•

[email protected]• www.zakWEALTHADVISOR.com


Documents

Insert appropriate Broker/Dealer disclosure here Genworth Financial Wealth Management, Inc. © 2010 NAVIGATING VOLATILE MARKETS Lighthouse Restaurant May