"I am grateful for what I am and have. My thanksgiving is perpetual." (Henry David Thoreau)

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1 David J. Klein Senior Vice President Financial Advisor The Auctus Group RBC Wealth Management Phone: Fax: Toll Free: website: December 10, 2018 "I am grateful for what I am and have. My thanksgiving is perpetual." (Henry David Thoreau) Retirement Wealth Plan Analysis: Are you on track to achieve your goals? Let us help you with our Wealth Plan Analysis. This analysis will help you understand your current financial situation, identify your life goals, and help you weigh the variety of decisions to determine what is best for you and your family. With the RBC Wealth Plan, we can create a personal analysis based on your vision and expectations for now and for retirement. Please call for a copy of what a Wealth Plan Analysis can do for you. There are no costs. It is part of the service we consider valuable to all our clients. Year-End Tax Planning: Please click on the other attachment or go to the website to review a number of tax planning options to consider for the end of this year. Let s give some thought to capital gains or losses, gifting of funds, contributions to your 401K or IRA, when to take Social Security, future retirement planning, and other areas that require your annual attention. We are always here to help and plan with you. My Website: Year-End Charitable Giving and Tax Planning Tips and The New Face of Wealth and Legacy are 2 new items that are on the front page of the website along with other interesting and important articles of interest. Please check them out. Key Statistics Year-to-date a/o 12/7/2018 Dow: (-1.34%) S&P 500: (-1.52%) Nasdaq: +0.95% Treasury Bond Yields: Year- to-date a/o 12/7/ year Treasury: 2.68% 2-year Treasury: 2.72% 5-year Treasury: 2.70% - Notice the yield is lower than the 2-year 10-year Treasury: 2.85% - Only.13 above the 2-year 30-year Treasury: 3.14%

2 Flattening Yield Curve: As noted above and in the following chart the yield between the shortterm and long-term treasuries is compressing. In this chart, the yield on the 5-year is lower than the yield on the 3-year treasury. Markets: (Barron s, IBD, WSJ, RBC, MFS, Reuters, Advisor Perspectives) For the week: Dow fell (-4.50%), S&P 500 fell (-4.60%), Nasdaq fell (-4.93%) This week s drop come on the heels of the S&P 500 s best week in about 7 years Contrary to popular belief, trading less, not more, during volatile markets generally wins (Merrill Lynch head equity strategist) The only winners last week of the 11 major sectors of the S&P 500 were utilities and real estate

3 Market Valuations: Historically, the average P/E ratio (Price to Earnings ratio) of the market is approximately 16x. Currently, the market is trading around that valuation. The market therefore is neither over nor under-valued at this time. By comparison, the world markets appear to be more undervalued than the US market.

4 Economic News: (Barron s, IBD, WSJ, RBC, MFS, Reuters, Advisor Perspectives) Economic growth is good, not great - cooling a bit Some see the prospect of a slower pace of the Fed raising interest rates Unemployment still at 3.7% - Average hourly earnings up 3.1% vs year ago Rising trade tensions, global market volatility are continued concerns Expectations are for continued but slowing growth

5 Question of the Week: What is a yield curve inversion and what does it suggest? Did You Know: Question and Answer From Last Week: 3.7% is a great unemployment rate. What is the 50-year average of the unemployment rate? Answer: The 50-year average of the unemployment rate is 6.2% As of 12/01/18, the economy of the United States has been expanding for 113 months, the 2 nd longest expansionary period in our nation s history. (BTN Research, National Bureau of Economic Research) The annual operating budget of Saudi Arabia is heavily dependent on the price of oil. The budget required a breakeven crude oil price of $83/barrel in 2017 and $85- $87/barrel in (BTN Research, Int l. Monetary Fund) Sports Trivia: Former NBA star Wilt Chamberlain scored a record 50.4 points per game during the regular season. On 3/02/1962, he had an incredible 100-point game. Chamberlain played every second of every game during the season. (BTN Research, NBA) Referrals: Many sincere thanks for your referrals of family, friends, and associates. I am deeply appreciative. Sincerely, David J. Klein Senior Vice-President Financial Advisor The views presented here are solely the views and opinions of David Klein and do not reflect the views of RBC Wealth Management, or its officers and directors. Data is believed to be from reliable sources, but we make no representation as to its accuracy or completeness. The Dow Jones Industrial Average covers 30 blue chip U.S. companies selected by the editors of the Wall Street Journal. The Dow represents about 25% of the NYSE market capitalization and less than 2% of NYSE issues. The Nasdaq Composite is a market-value weighted index that measures all NASDAQ domestic and foreign common stocks. The Standard and Poor s 500 is an unmanaged, capitalization weighted benchmark that tracks broad-based changes in the U.S. stock market. This index of 500 common stocks is comprised of 400 industrial, 20 transportation, 40 utility, and 40 financial companies representing major U.S. industry sectors. The index is calculated on a total return basis with dividends reinvested and is not available for direct investment. This material is based on data obtained from sources considered to be reliable. However, it is not guaranteed to accuracy and does not purport to be complete. The illustrations are for informational use only. RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in conjunction with your independent tax or legal advisor. RBC Wealth Management, a division of RBC Capital Markets