Strategies

Trafalgar Investment Advisers LLC's objective is to help its clients achieve their investment goals by creating, implementing and overseeing a portfolio of financial products, customized for each client using strategies based on sophisticated economic analysis, and designed to allow the client to maintain control over his or her wealth in a manner appropriate to the client's risk level.

Trafalgar Investment Advisers LLC conducts a pre-advisory personal consultation with each prospective client to determine the client's current financial position and objectives. Topics discussed during such consultation include, but may not be limited to, the client's liquidity needs, risk tolerance, and other variable relevant to understanding the client's unique investment circumstances.

Successful investment management requires a clear picture of the client's financial goals. Setting reasonable targets is essential to a productive professional relationship with our clients. Therefore, to reduce the possibility of miscommunication, Trafalgar requires every client to complete a Confidential Client Assessment prior to conducting investment advisory services. This Assessment will assist Trafalgar Investment Advisers LLC in clarifying the client's overall personal finances and objectives.

A Confidential Client Assessment seeks to:

• Define and narrow a client's objectives and investment options
• Encourage creative thinking
• Identify areas of greatest concern
• Create a unique snapshot of the client's financial character
• Provide an effective and efficient way for Trafalgar Investment Advisers to address a client's unique financial needs and objectives

Once a Confidential Client Profile has been completed, each client will receive a written analysis of Trafalgar's understanding of that client's investment objectives, needs, risk tolerance and include a proposed investment strategy.

Investment Selection

The essence of our approach toward investment management is to select individual companies which meet certain requirements. The five-step process Trafalgar Investment Advisers LLC uses to review a company is as follows:

• Financial Performance and Strength - We identify companies which earn above-average return on capital, generate excess free cash flow, and employ moderate to low debt.
• Business Track Record - We focus on companies that have a long-term operating history. Although past performance does not guarantee future results, it can inform the future. To properly research the past performance of a business, one must have time, perseverance, and knowledge about what to look for in a growing, successful operation. One of Trafalgar Investment Advisers LLC's greatest assets is its devotion to research.
• Business Outlook and Opportunities - We select companies with favorable long-term business prospects. We want to own companies that have a sustainable franchise or business advantage. We seek growth businesses.
• Management Owners - We believe in investing in companies whose management thinks and behaves like an owner. We require that management be honest and candid with shareholders and take action to promote the long-term health of the company.
• Valuation - A company's stock market valuation in the long run has everything to do with earnings and revenue growth. We measure the intrinsic value of a business and its internal rate of return compared to other stocks and fixed income.

Asset Protection

Trafalgar Investment Advisers LLC will occasionally engage in certain activities designed to protect a client's assets. These risk-mitigation strategies may vary from purchasing exchange-traded funds that move inversely to the S&P 500 Index, purchasing put options, and executing "buy-write" hedge strategies.

Institutional investors routinely employ standard asset allocation policies when allocating assets. These policies typically do not have a category for hedged equities, i.e. an investment approach that utilizes long equities and sells index options against those equities. These strategies are also referred to as "buy-write." An example of a buy-write strategy is buying the representative fund for the S&P 500 Index (symbol:SPY) and selling the one month at or near the money call option on that index. A buy-write strategy can help institutions increase the utilization of their equity assets by monetizing the volatility of those assets and creating a new income stream from selling options. A buy-write strategy may be expected to outperform a long only portfolio in bear markets and lag in bull markets. Thus, this strategy is used very selectively and only within a given client's risk profile.