Investment Advisors: Stephen Share sshare@wiscoinvest.com Greg Schroeder gschroeder@wiscoinvest.com

Second Quarter 2015

DEAR CLIENTS & FRIENDS;

Both the U.S. and International equity markets were flat in the second quarter. Year to date, International equity, in aggregate, is up 4%, slightly outpacing the 2% gain in the U.S. International markets are at least keeping pace with the U.S. market so far this year after underperforming by more than 50% since the beginning of 2010.

The U.S. fixed income markets were under pressure in the second quarter with the Barclays aggregate bond index declining 2%. Since late April, treasury yields have been on the rise as global growth expectations are improving and the anticipated Federal Funds rate hikes appear more likely to begin in the next few months. As a result, the 10-year treasury yield climbed from 1.93% at the beginning of the quarter to 2.34% at the end.

After an extended period of lackluster results, Commodities showed some signs of life in the quarter. The Dow Jones-UBS Commodity index posted a 5% gain this period led by an 18% gain in crude oil (although crude oil is still 50% off its June 2014 highs) and a sharp increase in agricultural-based commodities in the last couple weeks of the quarter.

As a reminder, our policy is to rebalance client portfolios on a semi-annual basis in order to realign with our current market expectations. To that end, we plan to complete our mid-year rebalancing in the next couple weeks. As always, feel free to contact us to discuss the rebalancing of your portfolio, your targeted risk level, or any other life changes that may be relevant to how your portfolio is invested.

We also wanted to remind you that we are available to assist you with your 401k portfolios (either your current or former employers plan), taxable portfolios, IRAs, insurance contracts, and/or bank savings accounts. We always appreciate the chance to review these portfolios for you to make sure you are invested appropriately for your current situation and appetite for risk. We can also help you consolidate many of these accounts with your current investments at Charles Schwab (our custodian) to upgrade your overall portfolio, simplify your financial recordkeeping and more efficiently manage your tax situation.

At Wisco, we believe our approach of designing well-diversified, low-cost investment portfolios is the best way to produce favorable results over time. We would like to thank you for the opportunity to work with you as your investment adviser. We appreciate your business!

Sincerely,

The Wisco Team

The domestic equity market was flat in the quarter with all market capitalizations trading in a relatively narrow range. The S&P 500 closed the quarter at 2063 off the all-time high of 2135 reached May 20th. S&P 500 1Q15 earnings grew a meager 3% y/y, while GDP declined 0.2% in 1Q15. A strong dollar and poor earnings from Energy companies were a substantial headwind to earnings, while a West coast port strike and bad weather in the East contributed to the economic slowdown. Going forward, we expect low-single digit earnings growth

in 2015. Low oil and gas prices have hurt earnings in the Energy sector, yet consumers spending has not shown much improvement given these lower input costs. Furthermore, the Federal Reserve could start increasing rates as early as September, which could be a catalyst to further strengthening of the dollar against other major currencies given most other central banks have easier monetary policies than the U.S. We feel a rate increase could be a headwind to earnings growth in the second half of 2015.

Wisco has reduced its domestic equity exposure in all but our most aggressive model. On a valuation basis, the S&P 500 is trading at a P/E of 17.2x 2015 consensus operating earnings which is higher than average and, with modest earnings growth, we think the market could tread water until earnings are able to accelerate. That said, we still like the prospects for the domestic stock market longer term and expect a positive return for the domestic stock market in 2015. However, 2015 returns are unlikely to match the previous three years in terms of performance.

Second Quarter 2015 Market Review

Wisco Investment ManagementWisco model portfolios are constructed using five different asset classes; Domestic Equity, International Equity, Domestic Fixed Income, Alternative Investments and Money Market. Our current model portfolio asset class allocations are as follows:

Second Quarter 2015

WISCO MODEL PORTFOLIOS Conservative Balanced Balanced Growth Growth Aggressive

Domestic Equity 30% 39% 46% 50% 65%International Equity 5% 9% 16% 24% 29%Domestic Fixed Income 49% 41% 30% 13% 0%Alternative Investments 8% 5% 5% 10% 5%Money Market 8% 6% 4% 2% 1%Total 100% 100% 100% 100% 100%

Target Volatility* 6% 8% 10% 12% 14%

*Target Volatility is our estimate for the annual standard deviation of portfolio returns. Source: Wisco Investment Management LLC

Source: Dow Jones U.S. Broad Stock Market Index and Wisco.

DOMESTIC EQUITY35%

30%

25%

20%

15%

10%

5%

0% 2Q15

1Q15

4Q14

3Q14

2Q14

1H15

2014

2013

2012

2011

Quarterly Returns13%

33%

2%1%

16%

5%5%

0%2%

0%

Like the Domestic market, International equity was more or less flat in the quarter. In Europe, the STOXX 50 declined 2% as weakness in Germany (down 6%) more than offset positive returns in smaller countries such as Hungary which was up 10% in the quarter. All eyes in Europe continue to be focused on Greece and if they will discontinue using the Euro as their primary currency. In Asia, markets were mixed. Hong Kongs Hang Seng posted a strong 7% gain but Australias market declined 6%. Japans Nikkei 225 increased 3% in the quarter. The FTSE Emerging Market Index was up 1% in 2Q15. The Shanghai composite was up 14% in 2Q15, however, this strength was partially offset by an 8% decline in Malaysias equity market.

Wisco is increasing our International Equity weighting in all but our most conservative model. While Greece is getting all the headlines in Europe, we feel that the European Central Banks quantitative easing is modestly accelerating growth. In addition, International Equities trade at a significant discount to Domestic Equities. Therefore, we feel International Equities may be in a position to start outperforming Domestic Equities after a period of significant underperformance over the last 5 years.

The Barclays Capital U.S. Aggregate Bond Index declined 2% in 2Q15, as the 10-year treasury yield started the quarter at 1.93% and ended 2Q15 at 2.34%. This steepening of the yield curve is likely the result of investors anticipating a rate increase by the Federal Reserve in the second half of 2015. Higher interest rates hurt performance across the Fixed Income spectrum with the Barclays U.S. Treasury Inflation Protected Securities Index (TIPS) falling 1% in 2Q15 and BoA Merrill Lynch Corporate Bond Index falling 3% in the quarter.

Wisco is increasing our Fixed Income exposure in all but our most aggressive model. However, in our more conservative models we are increasing our exposure with a zero duration fund. This fund should provide interest income above money market rates, yet perform better than traditional bond funds in an environment of rising rates and accelerating economic growth. Looking forward, we think it is more likely than not that the Fed starts increasing rates this year and that the economy improves in 2H15. In this scenario, we think shorter maturity bonds will perform better than longer maturity bonds and a zero duration fund helps shorten our models overall average maturity.

DOMESTIC FIXED INCOMEINTERNATIONAL EQUITY20%

15%

10%

5%

0%

-5%

-10%

-15%

-20% 2Q15

1Q15

4Q14

3Q14

2Q14

1H15

2014

2013

2012

2011

Quarterly Returns

-3%

4%

17%14%

0%4%5%

-14%

-3%

Source: MSCI ACWI ex USA and Wisco

-5%

10%

8%

6%

4%

2%

0%

-2%

-4% 2Q15

1Q15

4Q14

3Q14

2Q14

1H15

2014

2013

2012

2011

Source: Barclays Capital U.S. Aggregate Bond Index and Wisco.

2%

Quarterly Returns6%

8%

3%

-2%

0%

-2%

2% 1%

0%

Wisco Investment Management LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities product, service, or investment strategy. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser, tax professional, or attorney before implementing any strategy or recommendation discussed herein.

ALTERNATIVE INVESTMENTS

The Dow Jones-UBS Commodity Index recovered from a tough 1Q15 returning 5% in the quarter. In agriculture, Corn prices increased 10%1 and Soybean prices increased 9%1, as farmers planted less acres than analysts had expected. Despite this increase it is worth noting that Corn is still over 50% below its 2012 peak, while Soybeans are down over 40% from their 2012 peak. Gold prices declined 1%2 in the quarter, while silver decreased 6%3 for the quarter. Real Estate Investment Trusts (REIT) declined 10%4 in the quarter as higher interest rates negatively impacted performance. Crude oil recovered some of its significant loss in the 2nd half of 2014 as WTI prices increased 18%5 in the quarter.

Wisco believes Alternative Investments are an important part of a well-diversified portfolio. With this in mind, we are adding an Agricultural

Commodity fund to all of our model portfolios, as we feel depressed agricultural prices could continue to show improvement in the second half of the year. In addition, we will continue to hold a Gold fund in certain portfolios.

MONEY MARKET

Wisco keeps a modest money market allocation in all of our model portfolios. The current yield of the Schwab Money Market is 0.01%. Low Federal Funds rates have held down short-term yields. While an increase in the Fed Funds rate may increase this yield later in the year, we think short-term interest rates will remain low for an extended period of time. Wisco is reducing money market exposure in all our model portfolios because we feel higher returns can be achieved in other asset classes.

1. Return calculation based on the near future contract as quoted in the Wall Street Journal. 2. Return calculation uses ETFS Physical Swiss Gold Shares (SGOL) as a proxy for gold.3. Return calculation uses iShares Silver Trust ETF (SLV) as a proxy for silver.4. Return calculation uses Schwab U.S. REIT ETF (SCHH) as a proxy for Real Estate Investment Trusts.5. Return calculation uses Cushing, OK WTI spot price FOB as a proxy for oil.

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