Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss

Investing in securities involves risk of loss that clients should be prepared to bear.

FIA’s security analysis is based on a number of factors including those derived from commercially available software technology, securities rating services, general market and financial information, due diligence reviews and specific investment analysis that clients may request.

FIA’s main sources of information include commercially available investment services, financial newspapers, periodicals and issuer-prepared information. FIA also receives research from consultants, including economists affiliated with Dimensional Fund Advisors (DFA). DFA provides historical market analysis, risk/return analysis, and continuing education to FIA.

FIA’s investment advice is based on long-term investment strategies incorporating Modern Portfolio Theory. FIA’s investment approach is firmly rooted in the belief that markets are efficient and that investor’s returns are determined principally by asset allocation decisions, not market timing or stock picking. FIA focuses on developing diversified portfolios, principally through the use of passively managed, asset class mutual funds that are available only to institutional investors and clients of a network of selected investment advisers.

Although all investments involve risk, FIA’s investment recommendations seek to limit risk through broad diversification and investment in conservative fixed income securities. FIA’s investment philosophy is designed for investors who desire a buy and hold strategy, with an investment time horizon of a minimum of five years, and preferably ten years or more. Frequent trading of securities increases brokerage and other transaction costs that FIA’s philosophy seeks to minimize. Investors who do not commit to Modern Portfolio Theory may not achieve positive long-term results.

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