December 1

Strategy is initiated and all purchases are made on an equal weighted basis.
Purchase the 30 Dow Jones Industrial Average positions.

Purchase the 10 largest positions in the S&P 500 Index (by market capitalization weighting) which are not included in the Dow Jones index.

Purchase the 10 largest positions in the Nasdaq 100 (by market capitalization weighting) except those in the Dow Jones Index or the top 10 of the S&P index.

Altria (formerly Philip Morris) is excluded from the 50 positions and the next largest firm will be used in its place according to the hierarchy above..

October 21

“Losers” are sold to harvest short term capital losses.

This classification includes any position with a loss for the strategy year-to-date.

Proceeds from the sales are used to purchase a no-transaction-fee low-cost large cap domestic ETF.

November 25

“Gainers” are transferred to the “Greenhouse” account to preserve long-term capital gains.

This classification includes any position with a gain greater than 10%.

The “Greenhouse” is monitored on an ongoing basis and any stock that has a 5% or more decline from its cost basis in 2 consecutive quarters is sold.

December 1 (following year)

Any remaining positions, referred to as “Runts”, held in the CIS account are sold.

These are stocks that neither fell in value as of 10/21 nor rose more than 10% as of 11/25.

These positions will have been held for a period of one year longer but if sold at a loss, they will not be included in the Strategy account for the following year.

The strategy is then re-initiated for the next year, if the client so chooses and adds funds if necessary to bring the holding to a minimum of $100,000.

Monthly

Dividends and any cash build up in the CIS and/or Greenhouse account are monitored monthly.

Cash target for CIS and Greenhouse accounts is approximately 1.0%.

When cash in the account exceeds 2.0%, excess cash is invested in a no-transaction-fee low-cost large cap domestic ETF (ticker: SCHX).