Investment Outlook for 2009

Charles Carlson, CFAChief Executive Officer

Richard Moroney, CFAChief Investment Officer

Charles Carlson, CFA

• Editor, DRIP Investor, since 1982• Contributing Editor to Dow Theory Forecasts• Chief Executive Officer, Horizon Investment

Services and Horizon Publishing Company• Author of eight books, including the

bestselling Buying Stocks Without A Broker and The Smart Investor’s Survival Guide

2008 Review – What Happened & Why

• Mortgage market debacle leads to problems in credit markets

• Balance sheet woes• Massive “Deleveraging”• Uniformity of declines across asset classes

Richard Moroney, CFA

• Editor, Dow Theory Forecasts, since 1994

• Editor, Upside, since 1999

• Chief Investment Officer and Portfolio Manager, Horizon Investment Services

• Developer of the Quadrix stock-rating system used by Dow Theory Forecasts, Upside, and Horizon Investment Services

Market Outlook for 2009

• What is the Dow Theory saying about this market?

• Is the market cheap? • Potential catalysts for a market rally

Dow Industrials

Dow Transports

S&P 500 StocksTrailing Price/Earnings Ratio

S&P SmallCap 600 StocksTrailing Price/Earnings Ratio

Bond Yields

Capital-Gains Favorites for 2009

-Trailing P/E Ratio - -Quadrix Scores-

Company (Price; Ticker) Current 5 Year Average Value Overall Industry

Accenture ($34; ACN) 12 19 65 91 Technology Consulting

Airgas ($38; ARG) 12 20 62 78 Industrial Gases

Biogen Idec ($47; BIIB) 18 37 56 93 Biotechnology

DirecTV ($23; DTV) 17 24 43 85 Broadcasting & Cable TV

Harris ($39; HRS) 11 22 68 96 Telecom Equipment

IBM ($88; IBM) 10 17 64 86 Computer Hardware

St. Jude Medical ($31; STJ) 16 28 47 77 Health-Care Equipment

Best Ideas Performance

2008 2007 2006 2005 2004

Strategy Since

Inception Date Inception

Best Ideas

20.8% -38.5% 12.3% 11.8% 10.0% 25.4%7/31/2003

50/50 Blend of

3.8% -38.0% 2.1% 17.0% 5.5% 14.9%Russell 1000/2000

  S&P 500 0.2% -37.7% 5.5% 15.8% 4.9% 10.9%

Performance through 11/30/08

Performance vs. PeersSharpe Ratio

Best Ideas Strategy 0.60

S&P 500 / Citigroup Pure Growth 0.23

S&P 500 / Citigroup Pure Value 0.40

S&P Midcap 400 / Citi Pure Growth 0.42

S&P Midcap 400 / Citi Pure Value 0.51

Russell 2000 Growth 0.24

Russell 2000 Value 0.48

Source: Zephyr's StyleADVISOR

Audience Q&A

• To join the question and answer session queue, click on the chat icon at the top of the page to open a dialog box in which you can ask your question.

• Or, you may email your question to PCavanaugh@HorizonInvestment.com.

Horizon Investment ServicesA unique approach to building wealth

• Personal Attention• Professionalism• Performance

www.HorizonInvestment.comCCarlson@HorizonInvestment.com

1-800-711-7969

Disclaimer• Performance through 11/30/08. Past performance is no guarantee of future results.

• Horizon Investment Services LLC, is registered with the SEC as an investment adviser. The firm manages equity, mutual fund, income, and balanced portfolios for U.S. investors. The composite performance results include all fully discretionary accounts for the strategies shown above managed by Horizon Investment Services and exclude any accounts with significant client-imposed investment restrictions. Accounts are added to the composite after their first full calendar month of investment performance. Accounts that have significant cash flows that total over 30% of assets are temporarily removed from the composite. Composite performance results are presented after brokerage commissions, reinvested income and advisory fees and are asset-weighted, time-weighted total return figures. Performance was reduced by the highest fee charged to any client employing these strategies for the periods under consideration. Actual fees may vary depending on fee schedule and portfolio size. Advisory fee schedules are available upon request or may be found in Part II of Horizon Investment Services’ Form ADV.

• As of November 30, 2008, the Best Ideas Strategy composite included 95 accounts with $28.4 million in combined assets. In addition to large and mid-capitalization stocks, the Best Ideas Strategy contains small-capitalization stocks, which tend to be more volatile. The inception date of the composite was July 31, 2003. The comparative market index for the Best Ideas Strategy is a 50/50 blended performance of the Russell 1000 and Russell 2000 indexes, calculated by averaging the cumulative total returns of the two indexes for the periods presented. In our opinion, this blended index represents a fair approximation of the composition of the Best Ideas Strategy. The Russell 2000 index is an unmanaged index that measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. The Russell 1000 index is an unmanaged index that measures the performance of the largest 1,000 companies in the Russell 3000 index of the 3,000 largest U.S. companies in terms of market capitalization. The S&P 500 index is presented solely because it is a widely followed index. The S&P 500 index is an unmanaged index that measures the performance of 500 large company stocks weighted by market capitalization. Past performance is no guarantee of future results.

Disclaimer cont.• The S&P 500 / Citigroup Pure Growth Index is weighted by style score. Only stocks that exhibit strong

growth or value characteristics are included. Constituents included all have a Growth or Value factor of 100% and a Growth or Value score greater than 0.25. The S&P 500/Citigroup Pure Value Index is weighted by style score. Only stocks that exhibit strong growth or value characteristics are included. Constituents included all have a Growth or Value factor of 100% and a Growth or Value score greater than 0.25. The S&P Midcap 400/Citigroup Pure Growth Index is weighted by style score. Only stocks that exhibit strong growth or value characteristics are included. Constituents included all have a Growth or Value factor of 100% and a Growth or Value score greater than 0.25. The S&P Midcap 400/Citigroup Pure Value Index is weighted by style score. Only stocks that exhibit strong growth or value characteristics are included. Constituents included all have a Growth or Value factor of 100% and a Growth or Value score greater than 0.25. The Russell 2000 Growth Index is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index and includes companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the small-cap growth segment. The Russell 2000 Value Index is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index and includes companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Value Index is constructed to provide a comprehensive and unbiased barometer for the small-cap value segment.

• Zephyr's StyleADVISOR is a software program that uses returns-based style analysis to quickly ascertain a manager’s style and creates a unique style benchmark that reflects that style. Source: www.styleadvisor.com.