Third Quarter 2013

Investment Management
Dear Clients & Friends; We are happy to report that the third quarter this year was a positive one for all our model portfolios. The domestic equity markets continued to post strong gains, climbing 6% in the quarter, while international equity markets were up 10%. Fixed income and commodities also experienced positive, albeit more modest gains of 1% and 2%, respectively. REITs were the only asset class to decline during the period. On the marketing front, Wisco will be exhibiting again this year at the In Business Expo & Conference at the Alliant Energy Center on Wednesday, October 23rd. If you attend the Expo, please stop by booth #629 and say hello. Also, our quarterly investment seminar will be held the following Wednesday, October 30th at 6:00 P. M. at Blackhawk Country Club. We will be discussing our investment strategies and outlook for the markets and economy. Please feel free to invite anyone you think may be interested, as all are welcome. We are including our third quarter 2013 market review newsletter with this mailing. We hope it offers some insight into our current portfolio positioning. We continue to believe that well-diversified, low-cost investment strategies will produce favorable results over time. As a reminder, we are always a phone call away if you would like to discuss your portfolio performance, targeted risk level, or any potential life changes that may be relevant to how your investments are managed. Thank you for providing us with the opportunity to work with you as your investment adviser. We appreciate your business. Sincerely,

Wisco

The Wisco Team

Stephen Share
sshare@wiscoinvest.com

Chas Janisch
cjanisch@wiscoinvest.com

Greg Schroeder
gschroeder@wiscoinvest.com

Office: 608.442.5507 Fax: 608.237.2206

402 Gammon Place, Suite 380 Madison, WI 53719

Wisco Investment Management

The Wisco model portfolios are constructed using six different asset classes; Domestic Equity, International Equity, Domestic Fixed Income, Commodities, Domestic Real Estate and Money Market. Our current model portfolio asset class allocations are as follows: Wisco Model Portfolios Domestic Equity International Equity Domestic Fixed Income Domestic Real Estate Commodities Money Market Total Target Volatility*
Conservative Balanced Balanced Growth Growth Aggressive

36% 0% 44% 5% 5% 10% 100% 6%

46% 5% 32% 5% 5% 7% 100% 8%

50% 10% 23% 5% 5% 7% 100% 10%

58% 15% 12% 5% 5% 5% 100% 12%

63% 25% 0% 5% 5% 2% 100% 15%

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

Third Quarter 2013 Market Review

Domestic Equity
20% 15% 10% 5% 0% -5% -10% -15% -20% 1Q10

Domestic Equity Returns

11% 12% 6% 6% 0% -3% -11% -15%
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

12%

13% 11% 6% 0% 3% 6%

impressive 6% and the market is now up 21% so far in 2013. Going forward, we feel investors will be focused on yet another debt ceiling debate and whether this political bickering will derail the fragile economic recovery. S&P 500 second quarter operating earnings increased 4% y/y and 2Q13 GDP grew 2.5%, indicating we continue to be in a slow growth environment. Despite some political uncertainty, we think an easy money policy from the Fed should allow continued economic growth and drive corporate earnings higher. At Wisco, we continue to have a positive view on U.S. equities even with the strong performance yearto-date. The market still appears reasonably priced with the S&P 500 trading at a P/E of 15.8x 2013 consensus earnings. Plus, we think short-term traders may rotate out of bonds and into stocks as the domestic economy continues to gain momentum.

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

Once again, the S&P 500 hit a record high during the quarter with the index reaching 1726 on Sept 18th. The Federal Reserve surprised investors by keeping in place its aggressive bond buying program. For the quarter, the domestic stock market increased an

International Equity
International Equity Returns
28% 21% 14% 7% 0% -7% -14% -21% -28% 1Q10

Domestic Fixed Income

5% 4% 3%

Domestic Fixed Income Returns

3% 2% 2% 0% -1% -3%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

4% 2% 1% 0% 2% 1% 0% 0% 1%

18% 8% 2% 4% 6% 0% -7% -14% -22%

2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

10% 6%

7% 2% -3%

10%

2% 1% 0% -1% -2% -3% -4% -5%

Source: MSCI ACWI ex USA and Wisco.

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

The international equity markets rebounded in 3Q13 posting a strong 10% gain. These gains were broad-based with most international markets posting positive returns. In Europe, the STOXX 50 gained 11% as accommodative monetary policies; slow growth and more currency stability helped the market. In Asia, markets in both Hong Kong and China recovered from lackluster second quarters to post double digit gains in 3Q13. Chinas housing market was strong in the quarter which alleviated investor concerns that home prices were going to collapse in China. Finally, emerging markets increased 5% in the quarter, Brazils IBOVESPA recovered 10% in 3Q13 but is still down -14% year-to-date. An improvement in natural resource prices helped resource-rich nations. Wisco continues to believe international equities are an important part of a well diversified portfolio. Furthermore, we prefer developed markets to emerging markets because we are concerned that emerging markets may prove to be the weak link in the global economy. We currently have exposure to international equities in all our model portfolios except our most conservative model.

The Barclays Capital U.S. Aggregate Bond Index recovered from its weak 2Q13 to post a modest 1% positive return. The bond market was able to eke out a positive return on news that the Fed would continue to aggressively buy Treasury and Mortgage bonds. This announcement halted the increase in yields and spiked demand for bonds. The 10-year treasury yield hit a 52-week high of 2.99% on Sept. 5th but started to decline rapidly after the Feds Sept. 18th announcement and closed the quarter at 2.61%. Barclays U.S. Treasury Inflation Protected Securities Index (TIPS) increased almost 2% in September as inflation expectations moved higher with the Feds easy money stance. Wisco reduced our Fixed Income exposure in all our model portfolios in July. While we continue to believe the asset class will exhibit low volatility, we expect lower returns for at least the next six months. Furthermore, we did purchase TIPS in our more conservative portfolios in July because we think inflation may be greater over the next 12 months than the market expects. Current inflation expectations are just 1.9% annually over the next 10-years per the Cleveland Fed and we feel this may prove conservative should the economic recovery strengthen.

Commodities
20% 15% 10% 5% 0% -5% -10% -15% -20% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

Domestic Real Estate

Commodities
20% 15%

Domestic REITs
15% 10% 13% 7% 7% 4% 11% 4% 0% -4% 7% 2% -1% -3%

16% 12% 5% 10% 1% 0% -5% -12% -2% -6% -10% 2%

10% 5% 0% -5% -10% -15% -20%

-6% -6%

-8%

-15%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Source: Dow Jones-UBS Commodity Index and Wisco.

Commodities, as measured by the Dow-Jones Commodity Index posted a positive return for the first time in 3 quarters, increasing 2%. Gold prices increased 8% in the quarter after falling 23% in 2Q13. Wisco purchased gold in our more conservative portfolios for the first time in July. The agricultural commodities (2%) and oil (8%) also had positive returns in the quarter. We continue to believe commodities offer unique return characteristics and continue to hold commodity positions in all our model portfolios.

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

Source: Dow Jones U.S. Select REIT Index and Wisco.

Real Estate, as measured by the Dow Jones U.S. Select REIT Index, was the only asset class in our model portfolios that posted a negative return in the quarter, declining 3%. REITs sold off in July and August as interest rates increased. When interest rates declined again in September REITs responded positively, but the rebound wasnt enough to offset the first two months of the quarter. We continue to feel REITs are a good investment for our client portfolios given that REITs have better yield characteristics than most equity investments and better appreciation potential than most fixed income investments. Therefore, Wisco has REIT positions in all of our model 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. We think short-term interest rates will remain low for an extended period of time.
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.