Shuki Investment Management, LLC

Transcription

1 Shuki Investment Management, LLC Madison Avenue Lakewood, Ohio Telephone: /3/2018 FORM ADV PARTS 2A & 2B This brochure provides information about the qualifications and business practices of Shuki Investment Management, LLC (S I M). S I M must provide this disclosure statement under applicable rules of the United States Securities Commission and the State of Ohio. If you have any questions about the contents of this brochure, please contact us at or mrmcshuki@gmail.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (SEC) or by any state securities authority. Additional information about S I M is also available on the SEC s website at You can search this site by a unique identifying number, known as a CRD number. Our firm s CRD number is

2 Item 2 Material Changes This item will be used annually to provide clients with a summary of new and/or updated information. Material changes and disclosures will also be provided on an interim basis as necessary. An annual updated brochure will be provided to clients within 120 days of the close of our fiscal year, December 31. 2

3 Item 3 Table of Contents Page ADV PART 2A Item 1 Cover Page 1 Item 2 Material Changes 2 Item 3 Table of Contents 3 Item 4 Advisory Business 5 Item 5 Fees and Compensation 6 Item 6 Performance-Based Fees and Side-By-Side Management 7 Item 7 Types of Clients 7 Item 8 Methods of Analysis 7 Item 9 Disciplinary Information 10 Item 10 Other Financial Industry Activities and Affiliations 10 Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading 10 Item 12 Brokerage Practices 11 Item 13 Review of Accounts 12 Item 14 Client Referrals and Other Compensation 12 Item 15 Custody 12 Item 16 Investment Discretion 12 Item 17 Voting Client Securities 17 Item 18 Financial Information 13 Item 19 Requirements for State Registered Advisers 13 Exhibit A Schedule of Fees 14 Exhibit B Statement of Investment Policy 16 3

4 ADV PART 2B Item 1 Cover Page 22 Item 2 Educational Background and Business Experience 22 Item 3 Disciplinary Information 22 Item 4 Other Business Activities 22 Item 5 Additional Compensation 22 Item 6 Supervision 22 Item 7 Requirements for State-Registered Advisors 22 4

5 Item 4 Advisory Business Shuki Investment Management, LLC (S I M) is an investment adviser with its principal place of business located in Lakewood, Ohio. S I M was organized in 2017 and began conducting business in S I M is registered as an investment adviser with the State of Ohio. Registration as an investment adviser does not imply a certain level of skill or training. Individuals controlling 25% or more of Shuki Investment Management, LLC are listed below: Mark C. Shuki, CEO Investment Management Services S I M customizes and manages investment portfolios with a fee-only engagement. S I M does not sell securities or charge commissions. Advice from S I M is not affected by any potential sales compensation. Investment instruments may include the following: Equities Fixed Income Convertible Securities Index Funds Exchange Traded Funds Exchange Listed Securities U. S. Treasury Securities Commercial Paper Mutual Funds Certificates of Deposit Option Contracts Corporate Debt Warrants Municipal Securities S I M provides investment management services for individuals, businesses, endowments, foundations and retirement plans. S I M manages advisory accounts on a discretionary basis. Decisions relating to investments in such accounts are guided by the clients stated objectives (i.e., capital preservation, growth, income, or growth and income), as well as tax considerations. Clients may impose reasonable restrictions on investing in certain securities, types of securities, or industry sectors. Different types of investments involve different characteristics and degrees of risk. Investments in particular securities will only be implemented/recommended when consistent with the clients stated investment objectives, tolerance for risk, liquidity, and suitability. Amount of Managed Assets As of the filing of this document S I M had $ 0 assets under management. S I M does not use third-party money managers. 5

6 Item 5 Fees and Compensation Annual fees for investment management services are based on a percentage of client assets under management..96% on account values from $ 1 up to $249,999.84% on account values from $250,000 to $999,999.72% on account values from $1,000,000 to $4,999,999 Account values greater than $5,000,000 negotiable Fees are based on the market value of assets under management on the last day of the month/quarter and are paid monthly/ quarterly in advance. The market value of assets under management includes all securities, cash and cash equivalents. See Exhibit A of this document, Schedule of Fees. Limited Negotiability of S I M s Advisory Fees: Under circumstances that S I M considers appropriate, the firm may enter into special fee arrangements, which may vary from the fee schedule described above. Fees may be paid directly by check, or with prior written consent, may be paid directly to S I M from the client s qualified custodian that maintains the client s account. The applicable annual fee for each client is identified in the investment advisory contract between SIM and each client. Custodian and Broker Fees and Expenses: In addition to our advisory fees, clients are responsible for payment of all fees, commissions and expenses charged by custodians and broker-dealers, for executing transactions that the client has authorized. Please refer to the Brokerage Practices section of this form ADV. Mutual Fund Fees: All fees paid to S I M for investment advisory services are separate and distinct from the fees and expenses charged by mutual funds and/or ETF s to their shareholders. Fees and expenses are described in each fund s prospectus. Fees will generally include a management fee, other fund expenses, and may include a distribution fee. If the fund also imposes a sales charge, a client may pay an initial or deferred sales charge. A client can invest in a mutual fund directly, without our services. In that case, the client would not receive the services provided by our firm which are designed, among other things, to assist the client in determining which mutual fund or funds are most appropriate to each client s financial conditions and objectives. Accordingly, the client should review both fees charged by the funds and the fees charged by S I M to fully understand the total amount of fees to be paid by the client in order to evaluate the advisory services being provided. S I M does not receive any of the commissions charged by mutual funds. S I M does not receive any of the fees charged by mutual funds and/or Exchange Traded Funds (ETF) s. Termination of the Advisory Relationship: The advisory agreement may be terminated by either the client or S I M at any time upon written notice to the other party. In the event of termination, the client shall be owed a prorated portion of the fees specified in the client agreement, calculated to the date of termination. 6

7 Item 6 Performance-Based Fees and Side -By-Side Management S I M does not charge performance-based fees nor participate in side-by-side management. Item 7 Types of Clients S I M provides advisory services to the following types of clients: Individuals Businesses Corporations Charitable Organizations Trusts High net-worth Individuals Item 8 Methods of Analysis, Investment Strategies, and Risk of Loss Methods of Analysis The following methods of analysis are used when formulating investment advice and/or managing client assets: Quantitative Analysis. Quantitative analysis attempts to predict the current value or future value of securities using mathematical measurements and calculations, statistical modeling and research. Consistent patterns are potentially identified and used to predict price movements in securities. Quantitative analysis does not take into account fundamental or qualitative factors. This poses a risk because relevant information may not be included when only using Quantitative Analysis for evaluating securities or securities markets. Fundamental Analysis. Fundamental analysis attempts to measure the intrinsic value of a security by analyzing economic and financial factors (such as the economy, industry conditions, financial status and management of a company). Fundamental analysis does not attempt to anticipate market movements. This presents a potential risk, as the price of a security can move up or down following the overall market regardless of the economic and financial factors considered in evaluating the security. Qualitative Analysis. S I M evaluates non-quantifiable factors such as quality of management, labor relations, and strength of research and development. While these factors are not readily subject to measurement, they can have a significant influence on the price of a particular security. 7

8 ETF and or Mutual Fund Analysis. S I M utilizes exchange traded funds (ETF s)and/or mutual funds to achieve a desired asset allocation and to diversify risk in a client s account. S I M selects funds that provide diversified, transparent and liquid access to an investment strategy. Investments in funds may be based on asset allocation or industry sector allocation. There are several risks in using ETF and /or mutual fund analysis. S I M does not control the underlying investments in an ETF or a mutual fund. It is possible that managers of the funds held by the client may purchase the same security, increasing the risk to the client if that security were to fall in value. There is a risk a manager may deviate from the stated investment mandate or strategy of the fund or ETF, which could make the holding(s) less suitable for the client s portfolio. Technical Analysis. S I M analyzes past market movements and applies analysis to present conditions in an attempt recognize recurring patterns of investor behavior and potentially predict future price movement. Technical analysis does not consider the underlying financial condition of a company. Regardless of market movement, this presents a risk that a poorly-managed or financially unsound company may under-perform relative to the stock market in general. Risk for all forms of analysis. Our securities analysis methods rely on the assumption that the companies whose securities we purchase and sell, the rating agencies that review these securities, and other publicly-available sources of information, are providing accurate and unbiased data. While we are alert to indications that data may be incorrect, there is a risk that our analysis may be compromised by inaccurate or misleading information. INVESTMENT STRATEGIES We use the following strategies in managing client accounts, usually applying a blend of approaches that are appropriate to the needs of the client and are consistent with the client s investment objectives, risk tolerance, time horizon, and other considerations: Long-term purchases. This strategy involves holding periods for securities for a time period of a year or longer. This strategy is used when we believe a security is currently undervalued and will appreciate in value over time. This strategy is also used to give a client exposure to a particular asset class regardless of current conditions for that asset class. A risk in a long- term purchase strategy is that by holding the security for a year or more, we may not take advantage of short-term gains that could be profitable to a client. Moreover, if our predictions about a security are incorrect, a security may have already fallen sharply before a decision to sell is made. Short-term purchases. This strategy involves holding securities for less than a year. This strategy attempts to take advantage of conditions we believe will result in near- term price swings. 8

9 There are many risks in short- term security purchases/sales. Risks include higher transaction costs, being influenced by market sentiment, lack of liquidity. Market trends and investor sentiment can also be factors that influence the short-term purchase strategy. Margin Transactions. Clients may arrange for margin credit, which is a loan from the client s custodian based on the value of the securities in the account. This lets the client purchase more stock than available cash balances would allow. A risk to margin transactions is the potential of a decrease in the value of the securities being pledged as collateral to fund the purchase of additional securities. The potential for loses exist because the custodian may force a sale of securities at unfavorable prices to cover the margin call if a client is unable to deposit more funds. Short sales. In certain instances, specifically authorized by our client to sell shares short, we borrow shares of stock for a client s portfolio from another broker or entity on a promise to replace the shares. We engage in short selling based on the belief that after borrowing the shares and selling them on the open market the price of the shares will decline allowing us to buy back the stock at a later time, and a lower price and then return the borrowed shares to the original owner. Short sales involve a high degree of risk. Short sales can result in unlimited losses. Asset Allocation. Asset allocation strategies divide a Client s account between equity securities, debt securities, cash and cash equivalents according to a client s investment goals and tolerance for risk set forth in each Client s Statement of Investment Policy (Exhibit B of this document). Allocation involves risk. The Client may not participate in sharp increases in the value of a particular securities, industries or market sectors. Option Trading. SIM may use options in an investment strategy or as a stand-alone investment strategy. An option is a contract that gives the owner the right but not the obligation to buy or sell a specific security at a specific price on or before a specific date. An option, like a stock or bond, is a security. The two types of options are calls and puts: A call gives the owner the right to buy a security at a specific price within a specific period of time. A call is purchased in anticipation of an increase in value of the underlying security. A put gives the owner the right to sell a security at a specific price within a specific period of time. A put is purchased in anticipation of a decrease in value of the underlying security. 9

10 Options may be used to speculate on the price of securities. Options may also be used to hedge an existing security position. The following are some of the option strategies S I M deploys when managing client accounts. Covered calls Protective puts Outright purchase of calls/puts Spreads Straddles Options can only be purchased /sold for clients that have given S I M authorization to do so. Risk of loss: Options buying/selling carries many risks and may result in losses some of which may be substantial. All investments/investment strategies involve risk. Risk of loss: Investments in securities are not guaranteed. A security may lose some or all of its value. Item 9 Disciplinary Information S I M is required to disclose any legal or disciplinary events that are material to a client s or prospective client s evaluation of our advisory business or the integrity of our management. SIM has no disciplinary history to report. Item 10 Other Financial Industry Activities and Affiliations S I M is engaged solely in the management of client s investment accounts. S I M does not participate in other financial industry activities. S I M does not have any industry affiliations. Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading S I M as a matter of policy and practice, and consistent with industry best practices, has adopted a written Code of Ethics covering its supervised persons. S I M s Code of Ethics requires high standards of business conduct, compliance with federal and state securities laws, protection of material non-public information, and reporting and record keeping of personal securities transactions and holdings of firm personnel. The firm s current Code of Ethics is reviewed annually by S I M s Chief Compliance Officer and is amended as appropriate. A copy of S I M s Code of Ethics is available to any client or prospective client upon written request to the Chief Compliance Officer at the mailing address set forth on the cover page of this firm disclosure brochure. 10

11 Item 12 Brokerage Practices S I M must obtain best execution for clients. The following factors and services are to be considered when S I M assists clients in evaluating broker-dealer services. Net price to client. Net price includes commissions, markups and markdowns, ticket charges and other execution related costs Types of securities a client holds or plans to hold Order sizes and types Ease of execution Clients current brokerage relationships Discounts available for aggregation of client orders Margin rates Quality and timeliness of client reports including trade confirmation, monthly, quarterly and yearly reporting Industry standards Client preference Trade desk access Financial stability of broker-dealer/clearing firm S I M permits clients to direct brokerage to a firm of their choosing. In this case S I M may not be able to negotiate the best combination of net price and favorable execution. This could increase costs incurred by clients that choose to direct brokerage. Soft Dollar Benefits S I M receives no soft dollars and/or soft dollar benefits from any broker, brokers or brokerdealers. Soft dollars/soft dollar benefits could be seen as a conflict of interest in that they could potentially cause clients to pay more in commissions and/or fees than they would have paid using another broker-dealer offering similar services. Clients referred by broker-dealers A broker-dealer may refer clients to use the services offered by S I M. In this situation S I M would attempt to negotiate the best possible combination of price and most favorable execution available. If a conflict exists or were to develop in the future it will be disclosed to the client and potential remedies proposed. Allocation and Aggregation or Block Trading S I M aggregates client transactions whenever possible and when it is advantageous to clients. Aggregation of orders, also called block trading, seeks to make the execution of client s orders more timely, equitable, efficient and less costly. In these instances, clients participating in any aggregated transactions will receive an average share price and transaction costs will be shared equally and on a pro-rata basis. S I M s policies, procedures, and ethical standards requires that no particular group of clients be favored or disfavored when aggregation of orders takes place. 11

12 Item 13 Review of Accounts Reviews: Account reviews are done quarterly. Securities positions are monitored daily. S I M reviews investments and investment strategies and will adjust the asset mix corresponding with client instructions both previously discussed and on an ongoing basis. Reports: All monthly reports and trade confirmations are generated by broker-dealers/clearing firms holding customer funds. S I M receives copies of all confirmations and monthly statements and uses these to generate yearly account reviews. Item 14 Client Referrals and Other Compensation S I M does not pay for client referrals. S I M does not accept compensation for client referrals. S I M does not participate in any soft-dollar arrangements. Item 15 Custody SIM clients, having agreed to grant discretionary authority under the Investment Advisor Agreement, effectively creates a custodial relationship between SIM and the client. While SIM does not have direct custody of client accounts, we utilize qualified custodians (broker-dealers, banks or other qualified custodians) who hold the clients assets. These qualified custodians are responsible for sending to clients their monthly, quarterly and annual statements. SIM recommends and urges all clients to review and compare their account statements from qualified custodians with SIM statements for accuracy and completeness. Item 16 Investment Discretion SIM manages accounts on a discretionary basis. Accounts are managed in accordance with the Statement of Investment Policy and risk tolerances provided to SIM by the Client. All clients must complete a statement of investment policy questionnaire with information describing their investment time horizon, goals and objectives, return requirements, risks and constraints, and tax considerations. SIM uses this information to develop portfolio strategies. The client s Statement of Investment Policy will provide the guidance for the SIM strategies which must not deviate from the statement. Client will also provide the letter of authorization to execute trades with the client s broker. A copy of the letter of authorization will be kept on file and provided to a clients broker and custodian. The letter of authorization can be construed as a Limited Power of Attorney. Said authority is restricted to trading of securities within the account named on the LOA. At no time will SIM have authority to instruct a qualified custodian to transfer assets out of the account without additional written instructions from the client. Item 17 Voting Client Securities S I M does not vote proxies for clients. 12

13 Item 18 Financial Information S I M never bills clients in advance for more than one month/quarter. S I M manages accounts on a discretionary basis. S I M never takes custody of client funds or securities. SIM is not required to provide a financial statement. Item 19 Requirements for State-Registered Advisers Mark C. Shuki is the proprietor and sole executive of Shuki Investment Management, LLC. He has over 30 years experience in securities markets. He attended Bowling Green State University from 1982 to Over the last three decades he was employed by the following broker dealers in chronological order. Blinder Robinson & Co Power Securities Lehman Brothers Rosenkrantz Lyon & Ross 02/1990 to 11/1990 Electronic Trading Group 1996 to 1997 Royal Alliance Associates 1998 to 2002 Financial America Securities 2014 to 2016 Mark C. Shuki conducts client acquisition/marketing activities for A J Rocco s in Cleveland, Ohio. This work averages 10 hours per week. SIM does not charge or accept performance-based fees. Neither SIM nor its management person has ever been involved in an arbitration claim or been found liable in a civil, self-regulatory organization, or administrative proceeding that is material to a client s evaluation of the firm or its management. 13

14 EXHIBIT A SAMPLE SCHEDULE OF FEES Client agrees to pay Shuki Investment Management LLC an Investment Advisory Fee for its investment advisory services, determined, calculated and payable as follows. The Investment Advisory Fee is based on a percentage of Client s assets that Advisor has been authorized to manage and is calculated and charged in accordance with the following fee schedule: Sample Calculation Assets under Management Annualized Fee $1 to $249,999.96% $250,000 to $999,999.84% $1,000,000 to $4,999,999.76% $5,000,000 and above Negotiable Account Value: $1,800,000 Annual Fee:.76% Quarterly Fee Calculation: $1,800,000 x.76% = $13,680/4 = $3,420 Monthly Fee Calculation: $13,680/12 = $1,140 The monthly/quarterly Investment Advisory Fee is based on the total market value of Client s account on the last day of each calendar month/quarter multiplied by the applicable annual rate and divided by12/4. The Investment Advisory Fee is billed and paid monthly/quarterly in advance (covering the next calendar month/quarter). Client s designated Custodian, an independent and unaffiliated party, will provide all month/quarter-end security valuations. When authorized to do so, Client s designated custodian will deduct the applicable monthly/quarterly fee and remit it to SIM. When it is not possible to do so, the Client will be billed directly and will remit payment directly to SIM within ten (10) days of date of invoice. SIM shall not have any involvement in determining month/quarter-end account value. If the Investment Advisory Agreement is executed any day other than the first day of a new billing period, the Investment Advisory Fee will be prorated based on the number of calendar days left in the period. When a Client adds/withdraws funds the Investment Advisory Fee will be prorated based on the number of calendar days remaining in the billing period. If a client withdraws funds during the billing period, a refund will be calculated and remitted to Client within ten (10) days of withdrawal. In the event either party terminates Advisory Agreement, a refund will be issued to the Client calculated using the remaining days in the billing period. At Advisor s discretion, SIM may combine the account values of family members living in the same household to determine applicable Advisory Fee. Combining Client s accounts with family members accounts (spouses accounts, minor children, joint accounts of Client and spouse and other types of related accounts) may qualify Client for a reduced advisory fee based 14

15 on the available breakpoints in the fee schedule laid out above. If Client authorizes SIM to use margin when managing the account, the market value of the account and the corresponding fee payable to SIM will be increased. SIM shall not be compensated based on capital gains in Client accounts. By signing this Exhibit, Client and Advisor agree to the above-described calculation and procedures for paying the Investment Advisory Fee due to Advisor for its investment advisory services to Client. Client(s) Name: Signature: Address: Advisor Representative Name: Signature: Address: 15

16 PURPOSE AND SCOPE EXHIBIT B STATEMENT OF INVESMENT POLICY A Client s Statement of Investment Policy ( SIP ) is a key component of a Client s investment strategy. The purpose of this SIP is to set forth in writing: Client s objectives and goals related to the investment assets in Client s portfolio; The asset classes that SIM may trade and hold in a Client s account; The permissible ranges of exposures for Client s portfolio; and Client s asset allocation and investment guidelines. The information Client provides SIM is instrumental in creating an investment strategy that best meets a Client s needs. Defining Client s investment objectives, establishing Client s risk tolerance and understanding Client s investment time horizon are key components in developing an effective investment strategy suitable for Client. This SIP is intended to summarize the investment philosophy and the procedures providing guidance for Client and SIM. The investment guidelines described in this SIP should be updated overtime as necessary to reflect Client s current status and philosophy regarding the investment of the portfolio. SIM will refer to Client s SIP as Client s investment accounts grow and evolve. SIM will use the criteria listed in Client s SIP to ensure that the investments selected for Client s portfolio continue to meet Client s requirements. If the Client s circumstances or goals change, Client is responsible for contacting SIM and asking that Client s SIP be updated to reflect as necessary so that SIM can reevaluate and adjust the investment strategy for Client s account appropriately. Client Accounts under Advisor s Management: Account Name/Title Account Number Current Market Value 16

17 INVESTMENT, RETURN AND RISK OBJECTIVES Investment objectives: Generally, there is a correlation between returns in the portfolio and the amount of risk Client is willing to accept. Client s looking for long-term growth in their portfolio may experience large price fluctuations over the short term, and generally need to accept higher portfolio risk if they seek higher returns. ( ) Speculative Growth Client is prepared to take exceptional risk and accept significant fluctuation in his/her portfolio to achieve his/her investment goals. This may include taking highly concentrated positions in high-risk/highly speculative securities. ( ) Aggressive Growth Client is not concerned with the level of fluctuation in his/her portfolio value. Client is prepared to take substantial risk to achieve his/her investment goal of significantly growing his/her portfolio. ( ) Moderate Growth Client is less concerned with the level of fluctuation in the portfolio value and is prepared to accept moderate risk to achieve their investment goals. Client has no need to receive current income from the portfolio. ( ) Cautious Growth Client is willing to accept a moderate level of fluctuation in the portfolio s value. Client has no need to receive current income from the portfolio. ( ) Growth and Income Client seeks to achieve both returns from capital appreciation and some current income. Client hopes to achieve this by investing primarily in equity securities (which may or may not produce current income) and debt securities of all grades and issuers. Client recognizes and accepts the increased risks associated with investments of this type. ( ) Current Income Client s primary goal is to have a portfolio that produces current income. Client understands that a portfolio seeking income above the 30-day U.S. T-bill rate carries risks and may be more volatile than the general market. ( ) Capital Preservation Client s primary goal is to preserve capital and seek a return equal to the current rate of inflation. Client is averse to short-term losses and can accept only minimal fluctuations in the portfolio value. Client has a need for current income from the portfolio. 17

18 CLIENT INFORMATION Client s estimated liquid net worth (excluding real estate): ( ) $0 to $500,000 ( ) $500,001 to $1 million ( ) $1 million to $ 5 million ( ) $ 5 million to $10 million ( ) Other Approximate percentage of net worth Client is entrusting to Advisor for investment: ( ) Less than 20% ( ) 21% to 40% ( ) 41% to 60% ( ) 61% to 80% ( ) More than 80% When Client needs capital in the account: ( ) No specific time horizon ( ) This year ( ) 1 to 2 years ( ) 2 to 5 years ( ) 5 to 10 years Client s expected tax rate this year: Client s minimum liquidity needs: Any legal or regulatory considerations: Risk Tolerance: Client s risk tolerance for the account should reflect the amount of risk Client is comfortable with. Client should notify SIM when there are material changes in the Client s financial condition or risk tolerance. ( ) Conservative Client values protecting principal over seeking appreciation, is comfortable accepting lower returns for a higher degree of liquidity and/ or stability, and primarily seeks to minimize risk and loss of principal. ( ) Moderately Conservative Client values principal preservation but is also comfortable accepting a small degree of risk and volatility to seek some appreciation. Client wants greater liquidity and is willing to accept lower returns and minimal losses. 18

19 ( ) Moderate Client values reducing risks and enhancing returns equally, is willing to accept moderate risks to seek higher long-term returns and is willing to accept a short-term loss of principal and a lower degree of liquidity in exchange for long-term appreciation. ( ) Moderate Growth Client values higher returns over the long-term, is willing to accept considerable risk, is comfortable with short-term fluctuations in order to seek long-term appreciation and is willing to endure larger short-term losses of principal in exchange for potentially higher long-term returns. Client is only secondarily concerned with liquidity. ( ) Moderately Aggressive Client primarily values higher long-term returns, is willing to accept substantial risk, believes maximizing long-term returns is more important than protecting principal, and is willing to endure large losses to seek potentially higher long-term returns. Client is generally not concerned with the liquidity of the portfolio. ( ) Aggressive Client values maximizing returns, is willing to accept substantial risk, believes maximizing longterm returns is more important than protecting principal, and is willing to endure extensive volatility and significant loses. Client is generally not concerned with the liquidity of the portfolio. ASSET ALLOCATION FRAMEWORK Asset Class Debt Securities Equity Securities % Allocation U. S. Government Securities Corporate Bonds Municipal Bonds Bond Funds/ETF s Common Stocks Preferred Stocks Stock Funds/ETF s T-Bills/Cash/CD s 19

20 USE OF MARGIN IN CLIENT S ACCOUNT Making investments in the account using margin loans increases the risk to the portfolio because both gains and losses are magnified. Margin borrowing leverages Client s investments, increases the risks to a client s investment equity, and may require additional deposits of cash and or the forced sale of securities in the account. When using margin, the Client risks losing more than the equity on deposit in the account. Client authorizes the use of margin Yes No Client authorizes margin up to % Client initials: AUTOMATIC PORTFOLIO REBALANCING Investments in Client s portfolio respond differently to changing market conditions, causing changes in asset allocation. Using the guidelines set forth in each Client s SIP, advisor will adjust asset allocation. Advisor will review the portfolio and each asset class that the portfolio is invested in. Rebalancing frequency: ( ) Monthly ( ) Quarterly ( ) Semi-annually ( ) Yearly ANY LIMITATIONS ON INVESTMENTS IN THE ACCOUNT Whether Client wants to take and hold short positions and understands the risk associated with short positions: ( ) Yes ( ) No Whether Client wants to take and hold positions in equity options: ( ) Yes ( ) No Whether Client is an insider in any publicly traded securities: ( ) Yes Company(s) ( ) No Client does not want the account to transact in these securities: Company: Company: Company: 20

21 ACKNOWLEDGMENTS By signing this SIP, Client acknowledges and understands that: 1. This Statement of Investment Policy accurately reflects Client s investment objectives, risk tolerance and expectations for the portfolio. 2. The type of portfolio outlined by SIM matches Client s investment objectives. 3. Client will inform SIM of any changes in financial situation and/or investment objectives for the entire investment period. 4. There is no guarantee of investment returns. 5. Returns fluctuate over time. 6. Client may incur loss of capital. 7. Client wishes to implement the asset allocation proposed by SIM in this Statement of Investment Policy. Client agrees to review account with SIM at least annually. Agreed to by: Signature: Print Name: Advisor: Signature: 21

22 FORM ADV PART 2B Brochure Supplement Item 1 Brochure Supplement Mark C. Shuki Madison AVE. Lakewood, Ohio Shuki Investment Management, LLC Madison AVE. Lakewood, Ohio This brochure supplement provides information about Mark C. Shuki that supplements the Shuki Investment Management, LLC brochure. You should have received a copy of that brochure. Please contact Mark C. Shuki if you did not receive SIM s brochure or if you have any questions about the contents of this supplement. Additional information about Mark C. Shuki is available on the SEC s website at Item 2 Educational Background and Business Experience Mark C. Shuki DOB 1963 Bowling Green State University attended Financial America Securities Inc. Registered Rep. Series Item 3 Disciplinary Information There are no legal or disciplinary events material to a client s or prospective client s evaluation of Mark C. Shuki. Item 4 Other Business Activities Mark C. Shuki is not actively engaged in any investment related business or occupation other than SIM nor is he involved in any other business activity not business related. Item 5 Additional Compensation Mark C. Shuki does not receive any additional compensation for providing advisory services. Item 6 Supervision SIM is a single person advisor. Mark C. Shuki is the sole employee and proprietor. He serves as the CCO, and can be reached at Item 7 Requirements for State Registered Advisors Mark C. Shuki has NOT been found liable in an arbitration claim alleging damages involving any of the following: (a)an investment or an investment-related business or activity; (b)fraud, false statement(s), or omissions; (c)theft, embezzlement, or other wrongful taking of property; (d)bribery, forgery, counterfeiting, or extortion; or (e)dishonest, unfair, or unethical practices. 22

23 Mark C. Shuki has NOT been found liable in a civil, self-regulatory organization, or administrative proceeding involving any of the following: (a)an investment or an investment-related business or activity; (b)fraud, false statement(s), or omissions; (c)theft, embezzlement, or other wrongful taking of property; (d)bribery, forgery, counterfeiting, or extortion; or (e)dishonest, unfair, or unethical practices. Mark C. Shuki has NOT been the subject of a bankruptcy petition. 23