Bear Market – Interrupted

The “Mother of all Bear Markets” will resume in 2023. The next plunge that takes us to the pandemic lows, will be driven by falling corporate profits. Beyond the recession driven decline, corporate profit margins are shrinking. Global outsourcing, falling interest rates, declining tax rates, and falling labor costs have all boosted profit margins 40% above historic norms in the last decade. Those factors are now heading in the opposite direction. If you are a nimble trader, you may still make money on this rally. More importantly, it will give previously trapped investors an opportunity to exit with much smaller losses before the next leg down.

Sincerely,

Clyde Kendzierski

FINANCIAL SOLUTIONS GROUP LLC

_{Unless otherwise indicated, investment opinions expressed in this newsletter are based on the analysis of Clyde Kendzierski, Managing Director and Chief Investment Officer of Financial Solutions Group LLC, an investment adviser registered with the California Department of Business Oversight. The opinions expressed in this newsletter may change without notice due to volatile market conditions. This commentary may contain forward-looking statements and FSG offers no guarantees as to the accuracy of these statements. The information and statistical data contained herein have been obtained from sources believed to be reliable but in no way are guaranteed by FSG as to accuracy or completeness. FSG does not offer any guarantee or warranty of any kind with regard to the information contained herein. FSG and the author believe the information in this commentary to be accurate and reliable, however, inaccuracies may occur.}

_{Investors should consider the charges, risks, expenses, and their personal investment objectives before investing. Please see FSG’s ADV Part 2A containing this and other information. Read it carefully before you invest.}

_{Past performance is a poor indicator of specific future returns. It, however, may be useful in your evaluation of how FSG performs in different market environments. Investors have the ability to achieve results similar to benchmark indices by investing in an index fund or Index-tracking ETF, typically with lower fees. Past performance of any security is not a guarantee of future performance. There is no guarantee that any investment strategy will work under all market conditions. There is no guarantee that the investments mentioned in this commentary will be in each client's portfolio.}

_{This material is intended only for clients and prospective clients of FSG. It has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy.}

_{This material is intended only for clients and prospective clients of the FSG. It has been prepared solely for informational purposes and is not an This circumstances material and does not objectives provide of persons individually who receive tailored it. The investment strategies advice. 7 and/ or It has investments been prepared discussed in without this regard material to may not be suitable for all investors. No mention of any security or strategy should be taken as personalized investment advice or a specific buy or sell recommendation. Please contact FSG to discuss your specific financial situation and suitability.}

_{S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Performance results reported herein were achieved in an actual account managed by FSG. This account serves as a model portfolio for FSG’s Diversified Sector Program. This account belongs to Clyde Kendzierski, Managing Director and is not charged advisory fees. Results reflect the net return in this account after expenses including commissions, fund management fees, and redemptions charges, if any, and reflect the reinvestment of dividends and other earnings. Performance returns are presented against the S&P 500 to show material economic and market conditions present during the period of time that FSG’s performance is presented and is not meant to serve as a comparative index. The S&P 500® is an unmanaged capitalization-weighted index of the prices of 500 large-cap common stocks actively traded in the United States. These results have not been audited. However, some results have been independently calculated and verified by an unaffiliated accountant. Where applicable, documentation is available by request.}

_{Most clients utilize our Diversified Sector Program for at least a portion of their portfolio. Individual client strategy blend is determined by client’s age, risk tolerance, goals, and other assets as well as other factors. Increased risk offers the potential, but not the guarantee of higher returns. Investments aligned with this strategy offer the potential for loss. Actual client returns will reflect the deduction of advisory fees as described herein and in FSG’s Form ADV Part 2A. No two accounts will necessarily achieve the exact same returns, as there are factors that are unique to each account. However, whenever possible, every effort is made to transact in client accounts simultaneously with those in the model portfolio, at the same price with the same fees (if any). Reasons that actual returns in individual client accounts may differ from others or the model include:}

_{Addition or withdrawal of client funds - This is especially true for new accounts during the first ninety days after an account is opened. Portfolios are not adjusted instantaneously to correspond with the model. Investments are phased in or out, as opportunities occur during subsequent weeks in an attempt to optimize the benefit to the client. The occasional or periodic withdrawal or addition of funds by the client will distort the allocation within the account between asset classes resulting in}

_{performance results that vary from the model accounts.}

_{· Taxable Status of Account Whether funds are held in a taxable or non-taxable account will affect performance. The Diversified Sector Program was created originally for tax-exempt or tax-deferred accounts. However, a version of the same strategy is employed for taxable accounts. The model account for this strategy is an IRA account. Few distinctions with regard to positions are made between taxable and non-taxable accounts.}

_{· Waiver and timing of all or some advisory fees - The actual timing of the deduction of advisory fees in a client account may differ from the timing in the model account. This may create a disparity between the asset allocation and position allocation of the client account versus the model account.}

_{· Different fee schedules based on asset size - FSG model returns are calculated according to the highest fees charged. Some actual fee schedules may be lower.}

_{· Technical trading errors - Trade errors are corrected according to the guiding principle that the client always be made whole.}

_{· Different commission rates - This fee is primarily generated in FSG accounts when trading in ETFs and is charged directly to the client by the brokerage firm. FSG does not participate in these commissions.}

_{· Performance of securities transferred into accounts by clients and brokerage commissions incurred from the sale of these securities - Some "legacy assets" may remain in the account indefinitely if the fees associated with their sale do not justify their sale or client instruction prohibits their sale.}

_{· Restrictions on holdings in accounts - Restrictions on holdings will prohibit the matching of performance. Whether the restrictions are imposed by the client directly or via the nature of the account, FSG’s inability to align the client’s account with the model account will result in a performance dispersion. Additionally, holdings requested by clients to be maintained in their account(s) will cause the performance of the account(s) to vary from the model account used.}

_{Some restrictions on mutual fund transactions may be imposed by the mutual fund companies. These restrictions are the result of prohibitions regarding short term sales (usually a buy and sell in the same fund within 30 days and typically triggered by the addition or withdrawal of funds in the client account). FSG attempts to avoid these restrictions when possible.}

_{Account size - The proportional effect on performance of fees and expenses accounts of varying size will be lesser or greater than the effect in the model account}

_{In most cases, clients should achieve returns similar to the model portfolio (after adjustment for fees) in accounts over $250,000 that have been established for over 90 days with no additions or withdrawals of funds during the period being measured.}

_{This material is intended only for clients and prospective clients of the FSG. It has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy.}

_{This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. No mention of any security or strategy should be taken as personalized investment advice or a specific buy or sell recommendation. Please contact FSG to discuss your specific financial situation and suitability.}

_{It is always the intention of FSG to minimize any negative effect on clients. Our success in that effort is subject to unanticipated market conditions. Consequently, past performance does not guarantee future returns}

_{THE 70% SOLUTION REPRODUCTIONS: Email forwarding and/or complete reproductions are authorized (must include complete attributions and disclosures). All partial quotes from The 70% Solution must include the source of your quote and reference to Financial Solutions Group LLC (FSG), the author’s name, and the following web address: www.financial-solutions-group.com. With the exception of complete reproductions and email forwards, please write to [email protected] to inform FSG of the time and location of the reproduction.}

_{Copyright © 2013, Financial Solutions Group LLC. ALL RIGHTS RESERVED. FSG is not liable for any actions taken in reliance on information contained herein.}

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