Investment Philosophy of Hildy & Stan Richelson, owners of the Scarsdale Investment Group Ltd.

The Richelsons' Investment Philosophy

Goals: We believe that individual investors should align their investments with their financial goals and life objectives, rather than seek to maximize their returns by speculating in the markets. While large institutional investors might pursue a total return strategy in risky investments, individuals should let their financial goals and life objectives determine their investments.

Safety and Cash Flow: Investments for individuals should provide both relative safety and a predictable cash flow. An individual's investments should not interfere with his sleep at night. High quality bonds should be considered the core investment because they will result in a predictable cash flow, the reduction of investment risk and enable the completion of a predictable financial plan.

Diversification: It was demonstrated in 2008 and again in 2011 that seemingly diversified assets move in synchrony in severe market downturns. Only high-quality bonds appreciated.

After-Tax Returns: All investments should be compared on an after-tax basis and only after all costs of investing are considered. High taxes and high investment costs will always substantially reduce returns.

Stocks are Speculations: Past investment returns should NOT be relied upon to project future returns. The world has changed and so will investment returns. Returns on all investments other than bonds are unpredictable. High quality bonds will come due at their face value and provide predictable returns and cash flow.

We consider stocks and most investments other than individual bonds to be speculations because the returns on them are not predictable. Speculations:

•	May or may not outperform bonds.
•	Are guaranteed to have more risk and volatility than high quality bonds.
•	May be subject to high taxes, transaction fees and bad timing.