WS Managed FOLIO's 1st Qtr 2011 Performance

12 of 15 WS Managed FOLIO's did better than their benchmarks this quarter.

Energy Resources             13.0%
Food Production                7.9%
REIT's & Resources             7.3%
Dividend Income                6.7%
Rising Rates                       6.5%
Aggressive Growth             6.2%
SSG Eurozone                    6.0%

S&P500 Index Benchmark              5.4%

Pipeline MLP's                    5.1%
Moderate Core                   3.5%

MSCI World Index Benchmark        3.2%
70%Eq/30%Inc Benchmark             3.1%
S&P500 Utility Index Benchmark   2.7%

Preferred Utility Income     1.9%
Hedged Income                  1.9%
Classic Defensive               1.5%

International Opportunity   - 0.3%
National Muni                    - 0.3%

10 Yr Treasury Index Benchmark    -0.6%

Japan Stocks                     -1.6%

Be sure to contact Wayne Strout at WS Wealth Managers Inc. for more information and a detailed explanation of methodology for calculating performance. Past performance does not predict future performance or ranking and should be just one of many sources of information evaluated. WS Wealth Managers Inc. does not sell performance but rather a disciplined, risk managed investment management process.

WS Managed FOLIO's Performance Ranking

Money Manager Review Ratings (Qtr Ending 12/31/2010)
WS Wealth Managers Inc. WS Managed FOLIO's
Rankings
1 yr		3 yr		5 yr
Global Equity Multi-Cap Blend
WS Food Production	#1		#1		#1
US Balanced Large Cap Value
WS Classic Defensive	#2		#1		#1
US Fixed Income Core Bond-Blend
WS Preferred Utility Income	#2		#2		#1
Global Balanced Multi-Cap Value
WS Moderate 70/30 Composite	#2		NA		NA
Global Balanced Multi-Cap Blend
WS Moderate Core	#8		#4		#1
Global Equity Multi-Cap Growth
WS Aggressive Growth	#13		#1		#1
Global Equity Large Cap Value
WS Rising Rates	#10		#5		#2
Global Equity Multi-Cap Value
WS Dividend Income	#11		#5		#5
WS Energy Resources	#12		#9		#4

Since 1987, Money Manager Review (MMR) has tracked, ranked and analyzed the performance of private money managers. Today, the magazine is available online as an interactive, customizable database at http://www.managerreview.com/. Investors and professionals use MMR to locate, research, compare, and contact any of 800+ managers offering 1300+ products. (Subscription cost is $295/yr.) A free Directory of Managers and other useful free reports are available at http://www.managerreview.com/. Data used with permission.

Be sure to contact Wayne Strout at WS Wealth Managers Inc. for more information and a detailed explanation of methodology for calculating performance. Past performance does not predict future performance or ranking and should be just one of many sources of information evaluated. WS Wealth Managers Inc. does not sell performance but rather a disciplined, risk managed investment management process.

1 yr Rankings based on actual data. 3 yr and 5 yr Rankings based on Proforma data.

Working with WS Managed FOLIO’s in FOLIO Advisor

The FOLIO Advisor program using WS Managed FOLIO’s is a Portfolio Management System. After opening an account with FOLIOfn Investments, Inc. in the FOLIO Advisor program, the Client and the Adviser (WS Wealth Managers, Inc.) choose Target Account Allocations.

The Target Account Allocation process is the selection of percentages applied to fifteen (15) WS Managed FOLIO’s available. (There are also two (2) specialty Model FOLIO’s managed by other investment advisers available.)

Generally, the Client and the Adviser will together select three “potential scenarios” with different Account Allocations—Yellow, Red, and Green. During a Yellow period, or a period of “caution” where the Client decides to be “relatively defensive” because there is a perceived risk of market decline, the Account Allocation might be: 40% Moderate Core; 10% Dividend Income; 40% Classic Defense; and 10% National Muni. During a Red period where the Client decides to be “very defensive” because of a perception of “near certainty” that markets will decline, the Account Allocation might be: 20% Moderate Core; 70% Classic Defense; and 10% National Muni. During a Green period where the Client believes an exposure to markets is attractive, the Account Allocation might include larger allocations to the nine (9) FOLIO’s designed to rise during periods of growth.

Once the Target Account Allocations are determined and funds are available in the account, the Adviser will “subscribe” the account to the appropriate WS Managed FOLIO’s in the amounts consistent with the Account Allocation for the period, according to the Client’s instructions. The Adviser’s Chief Investment Officer manages each FOLIO: buying, holding, selling and rebalancing securities; using best efforts to achieve the objectives of each FOLIO. The process is similar to the CLIENT choosing a collection of mutual funds where the holdings in each mutual fund is managed by the fund manager/s. In the FOLIO Advisor program, following this illustrative example, the WS Managed FOLIO’s are like mutual funds managed by the Adviser’s Chief Investment Officer.

The FOLIO Descriptions clearly indicate that the Adviser can tactically change the character (increase cash allocation) of the holdings in each FOLIO when it is deemed advantageous to do so, however one major benefit of the FOLIO Advisor program is the use of a Rotation Strategy where the Account Allocations are changed from the Green to Yellow to Red, etc. as deemed advisable by the CLIENT with guidance and advice from Adviser.

The Adviser does not claim to be able to predict the future with precision, but will periodically provide a balanced forecast to the Client using “Reasonably Reliable Leading Indicators” or RRLI’s that will assist the Client in choosing a Green, Yellow, or Red scenario Account Allocation. One major RRLI is the US Treasury Yield Curve. None of the RRLI’s are 100% reliable. Choice of the scenario by the Client will depend on their judgment and risk tolerance.

This is not a market timing system. It is an intelligent Asset Allocation Strategy for adapting to changing market conditions. It must be noted that moving from one allocation to another may deprive the Client of substantial gains if markets rise significantly during periods when a Red scenario Account Allocation is chosen. It must also be noted that significant market/account declines may occur without warning no matter what scenario Account Allocation is chosen. Investing always involves significant risk.

Cost of the program (subject to a minimum asset level) and management of the FOLIO’s by the Adviser is a fixed annual percentage of assets in the account. Fees are deducted quarterly in arrears. There is no extra cost for shifting from one Account Allocation to another. (e.g. from Green to Yellow) Actual FOLIO’s percentages will probably drift away from the target Account Allocation and can be manually “rebalanced” by the Adviser upon the Client’s request on an annual basis. A more frequent rebalancing of Account Allocation can be accomplished by “subscribing” to a pre-set “published” FOLIO Allocation.

While it is possible to transfer securities to FOLIOfn with an “in-kind” transfer, it is generally required that new funds be added to accounts in the FOLIO Advisor program by the transfer or deposit of cash. This can be accomplished by check, wire transfer or electronic (EFT) transfer. Rollovers of IRA accounts at brokerage firms can be liquidated at the old broker with account balance transferred via the ACAT system without tax consequences. Special arrangements are possible for positions in non-qualified accounts where there are concentrated stock positions and the intent is to sell a major part of the holdings after transfer but with the lower cost of using the FOLIO Advisor program.

Under specific agreement between the Client and Adviser, additional “custom made” or “Ready to Go” FOLIO’s may be subscribed to within FOLIO Advisor, however all normal fees shall still apply. Such “special” holdings will only be considered if in the sole opinion of the Adviser (using a fiduciary standard of care) such holdings are consistent with the best interest and risk tolerance of the Client.

Clients are encouraged to provide publically available information to the Adviser about specific securities that might lead to improved performance of one or several WS Managed FOLIO’s. It is important to recognize that the performance of each WS Managed FOLIO is less dependent on any one security and more dependent on how all of the securities in the FOLIO work together providing benefits from diversification. The FOLIO Advisor program and it’s powerful cost efficient technology can increase the value of those benefits.

The client has the option of choosing from eight tax lot tracking options to help manage capital gains and minimize current tax liability. The Adviser does not attempt to limit realized gains when managing the WS Managed FOLIO’s. The FOLIO’s are managed by the Adviser with the goal of total pre-tax return.

The Client will have access to information about the account and it’s holdings online at www.folioclient.com. This includes performance information, holdings in each FOLIO, back-testing and metrics for the FOLIO’s that are subscribed. Account Statements, Confirmations and Tax Documents are all available on-line. In fact, for efficiency and preservation of natural resources all information is supplied only electronically. Client is required to understand and accept the risks of on-line investing.

Client is required to carefully read all disclosure documents before deciding to participate in the FOLIO Advisor program using WS Managed FOLIO’s. These include: the FOLIOfn Advisor Addendum to Investment Advisory, Supervision and Management Agreement; FOLIOfn Account Opening Disclosure Affirmation; and FOLIOfn Advisor Customer Agreement.

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This is not a complete discription of the program, but rather a summary. For more information, be sure to engage with WS Wealth Managers Inc. for a more thorough two way communication.

Investment advisory services by WS Wealth Managers Inc., a registered investment adviser.

Securities and Custody thru FOLIOfn Investments Inc., Member of FINRA and SIPC.

FOLIO Advisor is a program offered to clients of registered investment advisers.

WS Wealth Managers Inc. and FOLIOfn Investments, Inc. are not affiliated.

Managed Model FOLIO's--List

See separate posts for more in depth description:

Conservative, Defensive and Core:
WS Moderate Core I 
WS Conservative 40/60 I 
WS Classic Defense I 
Thematic:
WS Aggressive Growth Low PEG I  
WS Dividend Income I
WS Energy Resources I
WS Food Production I
WS Rising/Higher Rates I                                          
Fixed Income:
WS Preferred Utility Income I
WS National Muni I
International/Global:
WS International Opportunity I 
WS Swiss and S. Germany Euro Zone I
WS Japan I
Specialty:
WS Pipeline MLP Dividend  I 
WS REIT's and Resources I
Other:
Global Fusion Equity Strategy
Traditional Values Index 500

WS Moderate Core I Description

Diversified core portfolio designed for long term growth and moderate risk. Normal allocation is 70% Equity (20% International and 50% Domestic) with 30% Fixed Income. Fixed Income includes mixture of Corporate and Treasury securities---average maturity and duration are adjusted according to CIO's assessment of market conditions. Can move to as much as 60% short term tactical Fixed Income allocation using 7-10 year Treasury ETF if CIO believes that Equity markets are extremely overvalued. Slight Value orientation with a basic Core style. Designed for reasonable current income with target of 4% yield from dividends and interest. Standard Deviation targeted at 60-75% of S&P500 with an estimated Beta of 0.70.

This FOLIO is designed to provide a "balanced" exposure to domestic and international markets. Hence it is designed to  be the "core" holding in any long term investment portfolio in the WS FOLIO Advisor Program.  It is expected that allocation to this FOLIO may be reduced during periods when client determines that equities are substantially overvalued.

Past performance does not predict future performance.

WS Classic Defense I Description

Defense in this case is not related to the "Defense Industry" but rather "defensive" in regards to portfolio investment strategy with the goal of capital preservation.

Defensive diversified supplemental portfolio for periods of uncertainty and/or when equity markets are deemed to be overvalued and likely to decline for a protracted period. Could be used as core holding for investors with extreme risk aversion however this is not intended purpose. Overweighted allocation to Consumer Staples. Normal allocation is 40-55% Equity (90% + Domestic) and 60-45% Fixed Income. Fixed Income allocation is adjusted from time to time depending on CIO's assessment of interest rate risk. Utilizes some exposure to 20 year Treasury ETF that outperforms during periods of interest rate declines that sometimes occur during equity market declines. Can move to as much as 80% short term tactical Fixed Income allocation using 7-10 year Treasury ETF. Standard Deviation targeted at 20-40% of S&P500.  Target Beta of less than 0.30 compared to S&P500.

Past performance does not predict future performance. All investments are subject to risk and future performance is uncertain.

WS Dividend Income I Description

Diversified supplemental portfolio having primarily Equities in US (65%) and Europe’s developed countries (35%) that have history and future expectations of reliable dividend payment. CIO gives priority to equities that have history and future probability of rising dividend payments. Designed for reasonable current income with target of 4.5% yield from dividends alone.  Equities of Banks and companies in Financial Services are minimized. Equity style is heavily oriented toward Large Cap Value.  Standard Deviation targeted at 70-85% of S&P500. Target Beta is less than 0.70.

Past performance does not predict future performance. Dividend income is result of payments made typically at the discretion of the company's management and Board of Directors and are not guaranteed. The value of equities with high dividend yields tend to decline signficantly if dividend payments are reduced.