HOW TO BUILD A MORE DYNAMIC RETIREMENT ACCOUNT (LIKE HARVARD)

September 27, 2010

Most of us have seen those clever commercials, for ING I believe, where people are walking around with a large orange set of 5, 6, and 7 digit
numbers representing “their number” for retirement. It isn’t clear to me whether that is the number they have, or the number they need for
retirement – but the point I suppose is that everyone has a certain number which they have either put away or need to put away for retirement.

ING wants you to think in the commercials that if you put your retirement assets with them, your big orange number will come with a nice
orange case in which you put your numbers to protect them. Safety sells well where retirement is concerned….

But the cynic in me wonders just how well the orange case can protect investor’s retirement accounts when it is likely a material made up of
65% stocks and 35% bonds. We’ve seen in the recent past (2000-2002, 2007-2008) how a traditional buy and hold portfolio doesn’t do so well
when a market crisis happens, yet most investors retirement portfolios remain heavily exposed to the stock market. And with most Americans
having the bulk of their investable assets in retirement accounts, this represents quite a problem in our opinion.

Consider that 36% of US household financial assets are in retirement accounts, according to the Q1-10 retirement report by www.ici.org, which
is the highest level since this group started tracking that rate in 1980. Some other stats in the report were telling just how addicted most
retirement accounts are to stocks – with 46% of retirement assets in mutual funds (where the breakdown by fund type is 67% in stock funds,
24% bond funds, 9% money market funds) and 36% of retirement assets in brokerage accounts where most investors likely trade, you guessed
it, stocks.

Typical IRA/401k sorely lacking:

With so much of America’s wealth in retirement accounts – why is so much of that wealth still concentrated in the stock market after such a
drastic sell off (2000-2008)? Don’t investors understand the need to diversify? Turns out, investors sure do understand the need to diversify
away from stocks (as evidenced by continued inflows into bond funds at the expense of stock funds over the past 18 months), but there is only
so much diversification available to them based on the limited choices in their retirement plans.

Put another way, it isn’t necessarily your fault that your retirement is so tied to stocks. For the grand majority of investors, that is the only game
in town as far as their IRA, 401k, 403b, 457, etc. is concerned. Nobody (except the investor) has a vested interest in making alternative
investments accessible through retirement accounts (seeing them as paying the brokers less money and having greater risk), so the plan
administrators, mutual fund companies, and stock brokers simply leave them out of the investment options in the grand majority of retirement
plans.

We checked in with Dana Lyons, Senior Vice President at registered investment advisor J. Lyons Fund Management and purveyor of the quite
helpful and economical 401k Self Help website www.my401kpro.com, to get a feeling for what the average retirement plan looks like.

Mr. Lyons tells us that the average 401k plan they see has just 14 mutual funds to choose from (out of about 8,000 open ended funds available
to US investors), with 10 of those 14 being stock funds. He says the options generally only offer a small sampling of a large cap fund, small cap
fund, so called balanced fund, growth fund, bond fund, and generic international equities fund.

He goes on to say that the most prevalent fund in investor’s retirement plans is the American Funds -Growth Company of America fund
(AGTHX). The cynic in us (again) can’t help but wonder if this fund is one of the options most seen in retirement plans because of its maximum
font load sales charge of 5.75%, but we’ll leave that topic for another day. The fund has been able to stay ahead of its broad benchmark, the
S&P 500, but that is about the only good thing we can say about it…

Past performance is Not Necessarily Indicative of Future Results

The unfortunate conclusion is that the retirement world is set up to benefit those who sell and distribute mutual funds, stocks, and bonds. Those
are really the only investment choices available to you if you are inside of your company’s 401k plan or calling the shots on your own IRA
through and account at Fidelity, Schwab, Ameritrade, or ING as mentioned earlier.

For any golfers out there, if we can imagine saving for retirement as the game of golf for a minute; it is as if retirement saving doesn’t allow you
to play with your own clubs. Instead, the retirement world provides a set for you that includes just two clubs, a driver (stocks) and a putter
(bonds). Good luck getting out of a ‘market’ bunker like 2008 with that driver….

The above mentioned Dana Lyons put it this way:

If retirement plan investors are to stand any chance of achieving positive returns, let alone returns sufficient for retirement, they'll need
access to other asset classes and market segments that offer better prospects for sustainable returns in the coming years, like commodities
or emerging markets in Asia and Latin America……retirement investors will need a broader array of less correlated investment choices that
have better long-term growth potential than conventional investment funds. Without such tools, retirement investors in this country are on a
road to disaster.

Do it yourself

Scary stuff, to be sure, but there is an answer. And that answer is to not play by the preset rules. Don’t accept the bag of clubs offered to you
by the retirement world. Instead, bring your own set of clubs which has a tool for the multiple environments you will encounter out there. Do it
yourself, so you can achieve the diversification you need.

One rather well known group which has been doing it on their own for quite some time now is the Harvard University endowment, managed by
the aptly named Harvard Management Company. Harvard was at the forefront of moving away from traditional stock and bond portfolios early
on, and has continued to be a maverick of sorts in the endowment world for its willingness to take on supposedly risky investments such as
commodities and absolute return vehicles like managed futures and hedge funds.

The table below shows the change in asset allocation percentages Harvard’s endowment has employed over the past 15 years, with the 2010
column showing allocations which have risen over that time in Green and those that have fallen in Red. You will see absolute return strategies
such as managed futures and hedge funds have grown from 0% to 16%, while US stock and bond exposure has dropped significantly. The
negative cash allocation represents the use of leverage.

This cost Harvard in 2008 (the portfolio lost -28%) when hedge funds became uncharacteristically tied to stock performance due to liquidity
issues, but it is hard to argue with the approach when one views the long term performance (doing 4% better per year on average for the past
20 years over a traditional 60/40 stock and bond portfolio).

Past Performance is Not Necessarily Indicative of Future Results

If we view endowments as sort of retirement accounts for universities, Harvard’s approach should tell us a lot about the types of assets we
should look to include in our retirement accounts. We can see from the asset allocation breakdown below that they have 16% of their assets in
absolute return vehicles such as hedge funds and managed futures, and 23% in real assets (defined as real estate and long only commodities).
Diving into the data a little bit more on their website, you can see that their 46% equity allocation is comprised of a 13% allocation to private
equity (a hedge fund strategy focusing on corporate equity investments at various stages correctly put into the equity allocation by Harvard
where most label it as an absolute return strategy).

That means that Harvard is investing over half (16% absolute return + 23% real assets + 13% private equity = 52%) of their $25+ Billion
‘retirement’ in asset classes not available in the average Americans retirement account. That tells me that they are able to do as well as they do,
in part, because of their access to these asset classes (a full time staff, huge budget, and Harvard brain power doesn’t hurt either).

Past Performance is not necessarily indicative of future results.

How do you add alternatives to your retirement account?

All of this begs the question: how can I add different asset classes to my retirement account in order to more closely resemble the Harvard
model and achieve better diversification of my retirement assets?

To try and look more like Harvard and less like the typical 60/40 blend available to you in your mass produced, prepackaged retirement plan,
you need access to different asset classes. The focus of those asset classes should be on absolute return vehicles such as managed futures and
hedge funds, in our opinion. We don’t recommend real estate and long only commodities (even though they are 23% of Harvard’s allocation) for
 individual investors because most investors already have a lot of real asset exposure in their primary residence and any additional investment or
vacation properties.

A report by the Levy Institute found that the primary residence accounted for about 32% of the financial assets of those with a total net worth
between $475K and $8.3 million (representing the top 20% of American households - excluding the top 1%). This means most investors are
already well over the 9% allocation Harvard has to real estate and 23% total to real assets based on their home. Be careful you don’t double up
that exposure in an attempt to diversify.

But how do you get this alternative asset exposure? I’m sure Managed Futures aren’t a choice in your Fidelity account or one of the secret
weapons in that orange case of ING’s. And I’m fairly certain they are not a choice in your employer sponsored plan. Can you just open an
account with a broker specializing in managed futures and fund it with the money in your retirement account.

Not so fast.…. to use retirement funds for any type of investment; an investor must open an IRA account with an independent administrator or
trust company. But to get alternative asset exposure, you need to branch away from the usual suspects in the retirement administrator world to
new companies who understand the need for alternative investments in retirement accounts.

There are several different trust companies which provide such accounts, with the rules and fees of each differing slightly. Investors open an
account with one of these administrators, transferring their existing IRA or 401k money into an account there. Then, the investor instructs the
administrator to fund an account at a firm like Attain in order to trading managed futures, or send money to an LLC for an investment in a hedge
fund, and so on. Attain works with the following two administrators to facilitate managed futures and fund investments through Attain.

1. Entrust IL

www.theentrustgroup.com

Chicago, IL

Approx. $3.5 Billion in total customer Assets ($120mm –Chicago office)

Set up fee = $0 (Attain Accounts), Annual Fee = $275

Read their whitepaper: ‘Are you locked in your 401k’

2. Millennium Trust

www.mtrustcompany.com

Oak Brook, IL

Approx. $3 Billion in total customer Assets

Set up fee = $50, Annual Fee = $150

How many clubs are in your golf bag?

Most investors pick a few fund options when first joining an employer and then never consider what is in their 401k or IRA until it is too late.
Others realize the problems with a limited set of choices in their IRA, but correct that by only getting access to more stock and bond based
investments through a self directed brokerage account for their IRA through the usual suspects. But whether in the former or latter camp, both
sets of investors are stuck on the golf course with just a few clubs (stocks and bonds), when better diversification requires a full bag of clubs
including managed futures and hedge funds (in our opinion and Harvard’s).

To get the most out of your retirement account, we urge you to consider diversifying into alternative asset classes by working with firms like
Attain and the administrators listed above to open up new avenues for investment. There are no government restrictions or laws against doing
so, although it may seem like it when looking through the investment options in your plan. It is just that the mutual fund conglomerates, stock
brokers, and traditional administrators like Fidelity have no interest in changing the game they dominate. Check out how many clubs are in
your golf (retirement) bag. If it is the same two clubs all of the other lemmings being force fed the pre packaged investment options, you owe it
to your future well being to seek out some alternatives.

- Walter Gallwas

Attain Capital Management does not guaranty any IRA administrator or its financial strength. Futures trading contains unique elements of risk and
investors considering using IRA funds for trading must understand that there is potential for loss of part or all of their retirement funds.

IMPORTANT RISK DISCLOSURE

Futures based investments are often complex and can carry the risk of substantial losses. They are intended for sophisticated investors and are not suitable for
everyone. The ability to withstand losses and to adhere to a particular trading program in spite of trading losses are material points which can adversely affect
investor returns.

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Feature | Week in Review |

Week in Review : Stock, Commodity, Currency Rally continues to benefit multi-market

programs
A hint from the FOMC meeting of another round of capital injection and better prospects from some sectors of the economy set the stage for another round of
buying in most commodity and index futures as the depth of the rally was seen across the board other than a few isolated incidences. After their monthly meeting
the FOMC indicated that they were ready if need be to add more liquidity to the economy in the U.S. if economic conditions warranted such a move which ended up
pressuring the U.S. dollar to levels not seen since February.

A round of better than expected economic reports added to the fanfare as increases in business activity and a jump in existing home sales from a 13 year low in
July aided ideas that the economy might be gaining further traction. Better business readings in Europe, especially in Germany also added a big confidence boost
for investors as it helped conceal recent news of possible sovereign debt issues dotted throughout the continent. News items from Asia were consistent with recent
economic appraisals, although the Bank of Japan hinted of another attempt at intervening to halt the recent appreciation in the Japanese Yen. Weather again
played a dominant force for the food and soft sector raising worries of possible price rationing as it appears Russia could have more problems from dry conditions in
their winter wheat growing as the window for planting nears an end. The best overall performing sector for the week was stock index futures as they added to their
consecutive week rally led by the tech heavy NASDAQ futures +3.35% followed by Russell 2000 futures +3.06%, Dow futures +2.33%, S&P 500 futures +2.10%
and Mid-Cap 400 futures +1.85%.

Metals continued to be a strong investment choice with Silver and Gold adding to their recent record high as investors took their cue from a fading U.S. Dollar and
prospects of economic stability and growth from several emerging counties. Silver +2.80% led the way up followed by Copper +2.73%, Palladium +2.71%, Gold
+1.61% and Platinum +1.10%.

Activity in the currency futures was guided by the FOMC policy statement indicating the Fed was ready to act on any indications the U.S. economy needed a further
push. This news was an albatross for the U.S. Dollar Index -2.51% pressuring the market down to levels not seen since February on ideas a further injection of
stimulus would again dilute the dollar further. The main beneficiary of the Dollar punishment was the Euro +3.40% which was found aid from news of better than
expected business activity in Germany. Action in the rest of the complex saw Swiss Franc add +2.67% followed by the Japanese Yen +1.88% and British Pound
+1.26%. Price activity for interest rate futures saw U.S. 30-Year Treasury Bonds +0.93% and 10-Year Treasury Notes+0.83%

Energy sector price activity was mixed to higher as a weaker U.S. dollar and better economic conditions in Europe sparked renewed investor purchasing in Crude
Oil +2.10%, Heating Oil +1.54% and RBOB Gasoline+1.12%. Natural Gas -4.62% continued to be hampered by heavy supplies despite news of a lower number of
drilling rigs put into operation in the past month.

The Food and Soft arena continued to be dominated by world weather issues which continue to aid price appreciation in most areas of this sector. Key Russian
growing areas continue to be hampered by dry conditions as farmers try to plant the new crop in low moisture sub-soil environment. Weather issues have also
cropped up in the Southern Hemisphere at the start of their growing season which needs to be worry free in order to relive the marketplace of price rationing fears.
Price activity for the week saw OJ +5.54%, Soybeans +5.33%, Sugar +4.95%, Cocoa +1.75%, Cotton +1.74%, Lean Hogs +1.70% and Corn +1.64%. Out of favor
markets in this complex were Coffee -4.60%, Live Cattle -3.40% and Wheat -2.60%.

Managed Futures

Multi-Market traders posted another strong week of trading this month due to strong trends in grains, bonds, foreign currencies, metals, and tropical commodity
markets like sugar, coffee, and cotton. Overall, there have been plenty of good trading opportunities for managers to pick and choose from this month. The top
performer thus far is Robinson Langley Capital at +11.46% who is holding long in many of the markets mentioned above. Right behind RL is Covenant Capital
Management Aggressive at +10.89% and it looks like one of these two programs will be our top performers for the month.

Other programs that have had a good month of trading include APA Modified +7.30%, Clarke Capital Worldwide +4.61%, APA Strategic Diversification +3.30%,
Clarke Capital Global Magnum +2.15%, Auctos Capital Management Global Diversified +3.80%, Futures Truth SAM 101 +1.98%, Futures Truth MS4 +1.50%, GT
Capital +1.03%, Hoffman Asset Management +0.70%, Accela Capital Management Global Diversified +0.29%, and Sequential Capital Management +0.26%.
Dighton Capital CTA Limited Aggressive is breakeven for the month.

Unfortunately, there are still some programs in the red for the month despite the advantageous conditions. However, many of these programs have bounced off their
monthly lows and have gained ground the past few weeks. Managers in the red include Mesirow Financial Commodities Low Volatility -0.20%, DMH -0.35%,
Mesirow Financial Commodities Absolute Return -0.37%, Integrated Capital Management Global Concentrated -1.27%, Applied Capital Systems -2.47%, Dominion
Capital Management Sapphire -1.83%, 2100 Xenon Managed Futures (2X) -2.96%, Clarke Capital Global Basic -3.30%, Applied Capital Systems 2X -4.80%, and
Quantum Leap Capital -5.01%.

Short-term traders continue to be mixed in September with Roe Capital Management Jefferson +1.69%, Roe Capital Monticello +1.10%, and Paskewitz Asset
Management Contrarian 3X St. Index down -8.46%.

With several markets such as Sugar, Cotton, and Coffee making parabolic moves this month, option manager performance for September thus far can best be
described by our recent blog post: “The trend is your friend…except when it isn’t”. Performance wise, ACE SIPC is the only option manager we track that is in the
black with an estimated gain of +0.38%. Other estimates include: Crescent Bay PSI -0.01%, Cervino Diversified Options -0.22%, ACE DCP -0.26%, Cervino
Diversified 2x -0.26%, Liberty Funds Group -0.29%, Kingsview Management -2.35%, Clarity Capital -4.11%, Crescent Bay BVP -5.01%, HB Capital -5.19%, FCI
OSS -6.72%, and FCI CPP -9.51%.

September has continued to be an excellent month for specialty market managers of all types. In particular, agriculture specialist Rosetta Capital Management was
able to add to their already impressive gains last week. So far for September Rosetta is ahead an estimated +15.5%, which would be their single largest month in
the past 6 years and take their YTD returns over 20%. Congratulations to Rosetta!

Other specialty market managers posting estimated gains for the month include Oak Investment Group +10.83%, AFB Forty Eighter Gold +2.22%, Cervino Gold
+1.13%, Emil Van Essen +0.93%, NDX Shadrach +0.66%, and NDX Abednego +0.11%. 2100 Fixed Income program is the only specialty market manager down
for the month as fixed income markets have seen a pull back from their recent uptrend. 2100 is down an estimated -2.09% for September and was ahead +6.48%
through August.

Trading Systems

Day trading systems were able to break out of their September funk and finish in the green last week. On the other hand, swing trading systems struggled to
determine the direction in the markets last week and as a result many of them finished in the red.

Swing systems struggled all week long with some getting long anticipating a break to the upside by the equity markets and others getting short in anticipation of the
range market continuing. AG Mechwarrior ES tried to play both sides but struggled. AG Mechwarrior ES started the week short from last week and began the week
by reversing and getting long. It stayed long till Tuesday where it took profit from the long trade. On Thursday things started to go downhill for AG Mechwarrior ES.
In the morning, AG Mechwarrior ES got long but then the market went down just enough for AG Mechwarrior ES to get out of its long position and initiate a new
short trade. But by the open on Friday the eMini S&P 500 market had jumped 13 points overnight and AG Mechwarrior ES got stopped out. For the week, AG
Mechwarrior ES was at -$1,107.50. Other swing systems results included MoneyMaker ES at -$105.00, Waugh CTO ERL at -$110.00, Strategic ES at -$755.00,
Moneybeans S at -$2,371.25, and Strategic v2 SP at -$3,600.00.

On the day trading side, leading the way with two solid trades for the week was PSI! ERL. The highlight of the week for PSI! ERL came on Friday when PSI! ERL
got long around 9 am and never looked back. The mini Russell market continued to climb upwards as the day progressed and PSI! ERL rode the 1.63% move for a
profit for $870.00. Last week PSI! ERL made $1,460.00. Other positive results included Upperhand ES at $240.00, NPI Traders ES at $247.50, and Waugh ERL at
$1,270.00.
Looking to rebound this week will be NPI Traders EC at -$575.00, Balance Point ES at -$665.00, NPI Traders S at -$865.83, Clipper ERL at - $887.39, and NPI
Traders US at -$1,215.00.

IMPORTANT RISK DISCLOSURE

Futures based investments are often complex and can carry the risk of substantial losses. They are intended for sophisticated investors and are not suitable for
everyone. The ability to withstand losses and to adhere to a particular trading program in spite of trading losses are material points which can adversely affect
investor returns.

Past performance is not necessarily indicative of future results. The performance data for the various Commodity Trading Advisor ("CTA") and Managed Forex
programs listed above are compiled from various sources, including Barclay Hedge, Attain Capital Management, LLC's ("Attain") own estimates of performance
based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the
individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes
proprietary results, and other important footnotes on the advisor's track record.

The dollar based performance data for the various trading systems listed above represent the actual profits and losses achieved on a single contract basis in client
accounts, and are inclusive of a $50 per round turn commission ($30 per e-mini contracts). Except where noted, the gains/losses are for closed out trades. The
actual percentage gains/losses experienced by investors will vary depending on many factors, including, but not limited to: starting account balances, market
behavior, the duration and extent of investor's participation (whether or not all signals are taken) in the specified system and money management techniques.
Because of this, actual percentage gains/losses experienced by investors may be materially different than the percentage gains/losses as presented on this
website.

Please read carefully the CFTC required disclaimer regarding hypothetical results below.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION
IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE
FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED
BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY
PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO
HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE
ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS
WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN
GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION
OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.

Feature | Week in Review |

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