Disclosures: Raymond James & Associates, Inc., member New York Stock Exchange, makes a market in [this security].

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2 The price of West Texas Intermediate Crude has traced out a potential double bottom. Technical analysis holds that if prices surpass $54 per barrel by 3%, and close there $55.75 the bottom is complete. It is not too late to invest in or add to energy assets to your portfolio. Upstream companies probably offer the most reward, as well as continue to carry the most risk. One way to reduce the idiosyncratic risk of buying one or a few companies is to invest in a fund to diversify the risk and gain wider exposure. The exploration and production companies offer the highest risk reward ratios. These stocks have been impacted severely by the price declines. The most profitable and prolific energy areas in the US are the Bakken shale and the Eagle Ford shale. Several companies are focused on these areas. The most desirable natural gas area outside of the Bakken and Eagle Ford is the Marcellus region. Natural gas companies have been impacted there as well. Across the northern border there are also some major basins, the Canadian exploration and production companies have also been severely impacted. A picture is worth a thousand words, so without further commentary, I reprise the chart supplement of upstream companies. The vertical line indicates the date of publication so you can consider the results.

3 Disclosures: Views expressed in this newsletter are the current opinion of the author, but not necessarily those of Raymond James & Associates. The author s opinions are subject to change without notice. Information contained in this report was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. There is no assurance the trends mentioned will continue or that the events discussed will occur. The market value of securities fluctuates and you may incur a profit or a loss. The performance mentioned does not include transaction costs which would reduce an investor s return. This material reflects the opinions of Mr. Lerner and not necessarily those of Raymond James & Associates. Further information on the investments discussed is available from Mr. Lerner. Investors should consider this report as only a single factor in making their investment decision. Commodities are generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only form a small part of a diversified portfolio. There may be sharp price fluctuations even during periods when prices overall are rising. International investing involves greater risks including currency fluctuations, differing, financial accounting standards and possible political and economic instability. These risks are greater in emerging markets. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any web site or the collection or use of information regarding any web site s users and/or members. Companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. Investments in the energy sector are not suitable for all investors. Further information regarding these investments is available from your financial advisor. Charts are provided for illustrative purposes only. Information provided is general in nature, and is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security. Past performance is not indicative of future results. There is no assurance these trends will continue or that forecasts mentioned will occur. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. Diversification and strategic asset allocation do not ensure a profit or protect against a loss. Investments are subject to market risk, including possible loss of principal. Raymond James & Associates, Inc., member New York Stock Exchange, makes a market in [this security]. 8

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