IMS Income is an investment program managed by Interfund Management Services, Inc. (IMS), a registered Washington State investment advisor.

IMS Income viewed as a

Conservative Investment

The IMS Income Testimonial Account

IMS applies a trade algorithm to High-Yield Mutual Funds (brown line) to create the IMS Income program Testimonial Account (blue line).

During the past seventeen years the algorithm has directed IMS Income to be invested defensively in the Money Market (green line) about 15% of the time.

The IMS Income Testimonial Account graph line represents the performance of the initial client account net of a management fee of 0.1% per month.

The IMS Income Testimonial Account

IMS applies a trade algorithm to High-Yield Mutual Funds (brown line) to create the IMS Income program Testimonial Account (blue line).

During the past seventeen years the algorithm has directed IMS Income to be invested defensively in the Money Market (green line) about 15% of the time.

The IMS Income Testimonial Account graph line represents the performance of the initial client account net of a management fee of 0.1% per month.

The IMS Income Algorithm

Invested in the high-yield mutual fund

position.

Invested defensively in the money

market.

Represents a positive performance day. Represents a negative performance day.

Signals to change investment position occur following an accumulation of net positive or net negative performance days.

Net Positive

Net Negative

The IMS Income Testimonial Account is the result of trades between High Yield Mutual Funds and the Money Market.

The IMS Income Algorithm

Invested in the high-yield mutual fund

position.

Invested defensively in the money

market.

Represents a positive performance day. Represents a negative performance day.

Signals to change investment position occur following an accumulation of net positive or net negative performance days.

Net Positive

Net Negative

The IMS Income Testimonial Account is the result of trades between High Yield Mutual Funds and the Money Market.

The Objective

The objective of the IMS Income program is to achieve the results listed below independent of forecasting the performance of the high-yield bond market.

The capture of:

Large gains Modest gains Small gains Small losses

The avoidance of:

Modest losses Large losses

Seventeen Year Average Annual Gain IMS Income: 9.8% AAG

The Objective

The objective of the IMS Income program is to achieve the results listed below independent of forecasting the performance of the high-yield bond market.

The capture of:

Large gains Modest gains Small gains Small losses

The avoidance of:

Modest losses Large losses

Seventeen Year Average Annual Gain IMS Income: 9.8% AAG

The Volatility Factor

It is unlikely a trade algorithm could be developed that would consistently protect against stock market risk. The reason is high volatility.

The chart below is the performance of the IMS Income Testimonial Account, the S&P 500 Stock Index and All High-Yield Mutual Funds for the two years 2008 and 2009.

The buy/sell algorithm IMS applies to high-yield mutual funds successfully avoided a bear market decline due to the lower volatility of high-yield securities.

The Volatility Factor

It is unlikely a trade algorithm could be developed that would consistently protect against stock market risk. The reason is high volatility.

The chart below is the performance of the IMS Income Testimonial Account, the S&P 500 Stock Index and All High-Yield Mutual Funds for the two years 2008 and 2009.

The buy/sell algorithm IMS applies to high-yield mutual funds successfully avoided a bear market decline due to the lower volatility of high-yield securities.

Conservative Investments Seventeen Year Comparisons

The IMS Income trade algorithm applied to high-yield bond mutual funds is a conservative investment.

IMS Income: 9.8% AAG The IMS Income Testimonial Account

Long-Term U.S. Bonds: 7.2% AAG The Vanguard Long-Term U.S. Treasury Index Mutual Fund (VUSTX)

Short-Term Bonds: 4.2% AAG The Vanguard Short-Term U.S. Treasury Index Mutual Fund (VBISX)

The Money Market: 2.4% AAG The Fidelity Cash Reserves Mutual Fund (FDRXX)

Conservative Investments Seventeen Year Comparisons

The IMS Income trade algorithm applied to high-yield bond mutual funds is a conservative investment.

IMS Income: 9.8% AAG The IMS Income Testimonial Account

Long-Term U.S. Bonds: 7.2% AAG The Vanguard Long-Term U.S. Treasury Index Mutual Fund (VUSTX)

Short-Term Bonds: 4.2% AAG The Vanguard Short-Term U.S. Treasury Index Mutual Fund (VBISX)

The Money Market: 2.4% AAG The Fidelity Cash Reserves Mutual Fund (FDRXX)

IMS Income: 6.5% 3 Year AAG 2014 Dividend Yield: 5.5%. High dividend yields are a structural advantage for the IMS Income program in all interest rate environments. Comment: During periods of rising interest rates annual performance could average less than 6.5%.

Long-Term U.S. Bonds*: 4.3% 3 Year AAG 2014 Dividend Yield: 2.2%. Comment: During periods of rising interest rates long-term bonds normally experience a negative total return.

Short-Term Bonds*: 1.1% 3 Year AAG 2014 Dividend Yield: 1.3%. Comment: During periods of rising interest rates short-term bonds normally approximate a zero total return.

The Money Market*: 0.1% 3 Year AAG 2014 Dividend Yield: 0.1%. Comment: During periods of rising interest rates money market returns normally increase.

*VUSTX *VBISX *FDRXX

Conservative Investments Performance during three years of low interest rates: 2012 – 2014.

Comments related to periods of rising interest rates.

Conservative Investments Three Year Chart IMS Income and Long-Term US Bond Performance Detail

IMS Inc +12.4% LT US + 3.5%

5.2% 0.6% 4.2% 2.2% 2.6% 0.3% - 0.2% 2.4% 2.8% 2.0% - 1.6% - 0.9%

- 5.7% 10.9% 0.0% - 1.1% - 2.0% - 5.8% - 2.3% - 3.4% 7.5% 4.2% 2.8% 8.5%

2012 IMS Inc + 5.0% LT US - 13.0% 2013 IMS Inc + 2.2%

LT US + 25.3% 2014

IMS Income: 6.5% 3 Year AAG 2014 Dividend Yield: 5.5%. High dividend yields are a structural advantage for the IMS Income program in all interest rate environments. Comment: During periods of rising interest rates annual performance could average less than 6.5%.

Long-Term U.S. Bonds*: 4.3% 3 Year AAG 2014 Dividend Yield: 2.2%. Comment: During periods of rising interest rates long-term bonds normally experience a negative total return.

Short-Term Bonds*: 1.1% 3 Year AAG 2014 Dividend Yield: 1.3%. Comment: During periods of rising interest rates short-term bonds normally approximate a zero total return.

The Money Market*: 0.1% 3 Year AAG 2014 Dividend Yield: 0.1%. Comment: During periods of rising interest rates money market returns normally increase.

*VUSTX *VBISX *FDRXX

Conservative Investments Performance during three years of low interest rates: 2012 – 2014.

Comments related to periods of rising interest rates.

Conservative Investments Three Year Chart IMS Income and Long-Term US Bond Performance Detail

IMS Inc +12.4% LT US + 3.5%

5.2% 0.6% 4.2% 2.2% 2.6% 0.3% - 0.2% 2.4% 2.8% 2.0% - 1.6% - 0.9%

- 5.7% 10.9% 0.0% - 1.1% - 2.0% - 5.8% - 2.3% - 3.4% 7.5% 4.2% 2.8% 8.5%

2012 IMS Inc + 5.0% LT US - 13.0% 2013 IMS Inc + 2.2%

LT US + 25.3% 2014

Volatility Comparisons 1997 to Date

IMS Income Long-term US Bonds* S&P 500 Stock Index*

- 18.8% 1998 - 45.5% 2000 – 2002 - 55.3% 2007 – 2009 - 15.7% 2010 - 18.4% 2011

- 10.3% 1999 - 12.3% 2003 - 17.3% 2009 - 13.0% 2010 - 10.1% 2012 – 2013 - 15.8% 2013

- 2.8% 2001 - 3.8% 2004 - 3.2% 2007 - 2.8% 2008 - 2.1% 2008 - 2.9% 2010 - 2.2% 2011 - 2.6% 2013 - 2.6% 2014

* VFINX * VUSTX

The percentages below illustrate performance declines from a recent high to a subsequent low and the year(s) during which they occurred.

The First Step

Compare the return and volatility of your conservative investments to the IMS Income Testimonial Account.

Any change should take the following factors into consideration.

Your age and financial status.

The impact low interest rates could have on all bond market investments.

A modified expectation for the performance of IMS Income during periods of rising interest rates.

Volatility Comparisons 1997 to Date

IMS Income Long-term US Bonds* S&P 500 Stock Index*

- 18.8% 1998 - 45.5% 2000 – 2002 - 55.3% 2007 – 2009 - 15.7% 2010 - 18.4% 2011

- 10.3% 1999 - 12.3% 2003 - 17.3% 2009 - 13.0% 2010 - 10.1% 2012 – 2013 - 15.8% 2013

- 2.8% 2001 - 3.8% 2004 - 3.2% 2007 - 2.8% 2008 - 2.1% 2008 - 2.9% 2010 - 2.2% 2011 - 2.6% 2013 - 2.6% 2014

* VFINX * VUSTX

The percentages below illustrate performance declines from a recent high to a subsequent low and the year(s) during which they occurred.

The First Step

Compare the return and volatility of your conservative investments to the IMS Income Testimonial Account.

Any change should take the following factors into consideration.

Your age and financial status.

The impact low interest rates could have on all bond market investments.

A modified expectation for the performance of IMS Income during periods of rising interest rates.

Availability

IMS Income is available to tax deferred accounts and to those custodial accounts that have low associated income-tax rates.

Equity Trust Company (ETC) of Cleveland, Ohio serves as the custodian for all IMS managed accounts.

The minimum investment in the IMS Income program is $50,000.

Three IRA Options

Transfer your IRA assets to ETC and elect to (1) engage IMS to manage the risk assets for a management fee, or (2) ask IMS to help you select a variety of index mutual funds for no management fee.

Transfer your entire IRA to ETC, but manage the higher risk investments yourself in a sub-account for no management fee.

Sell some of the conservative assets in your current IRA to reinvest in the IMS Income program in a second IRA.

Availability

IMS Income is available to tax deferred accounts and to those custodial accounts that have low associated income-tax rates.

Equity Trust Company (ETC) of Cleveland, Ohio serves as the custodian for all IMS managed accounts.

The minimum investment in the IMS Income program is $50,000.

Three IRA Options

Transfer your IRA assets to ETC and elect to (1) engage IMS to manage the risk assets for a management fee, or (2) ask IMS to help you select a variety of index mutual funds for no management fee.

Transfer your entire IRA to ETC, but manage the higher risk investments yourself in a sub-account for no management fee.

Sell some of the conservative assets in your current IRA to reinvest in the IMS Income program in a second IRA.

Chart Detail

IMS Income is represented by the initial IMS Income program account referred to as the Testimonial Account.

High Yield Mutual Funds are represented by the FastTrack average of all high-yield mutual funds that are followed by FastTrack—335 on October 31st 2014.

The Money Market is represented by the Fidelity Cash Reserves mutual fund, symbol FDRXX.

The Standard & Poors 500 Stock Index is represented by the Vanguard S&P 500 Index Fund, symbol VFINX.

The symbol of the Vanguard Long-Term U.S. Treasury Fund is VUSTX.

The symbol of the Vanguard Short-Term Bond Index Fund is VBISX.

Disclaimer IMS Income invests in securities that have a risk of loss. There can be no guarantee that an IMS client account will increase in value or avoid a loss of capital.

www.imsadvisor.com