September 1, 2016

Dear Friends,

A popular approach many investors used in past years to help decide which stocks to add
to their portfolios has returned to favor over the past few quarters. This methodology
focuses upon the securitys dividend yield, i.e., the companys cash dividend divided by its
market price.
This dividend approach to portfolio management fell out of favor several years ago when
the economy was more robust. Technology was changing rapidly, plant and equipment
outlays were increasing, and productivity was rising. Investors were more concerned with
the growth rate of a companys earnings and its price/earnings ratio than its cash dividends.
They had good alternatives for earning a safe and steady cash return on liquid assets
because the interest rate on government bonds was frequently higher than the dividend
yield of many commons stocks.
Over the past eight years interest rates on government bonds fell sharply and yields are
now at unprecedented low levels. Investors, however, continue to need assets that are
reasonably liquid and generate meaningful cash returns. We believe these considerations
are strong factors behind the differences in the returns of portfolios consisting of high
dividend paying stocks and corporate bonds and those that concentrate in stocks that pay
little or no dividends.
Between the first of this year and today, many portfolios composed of high dividend paying
common stocks and corporate bonds generated double digit returns. In contrast, over this
same period, the total return of many portfolios composed of growth stocks that pay little or
no dividends generated less than 5 percent.
This new financial environment poses a challenge for us as your financial advisor and
money manager. When the economy becomes more prosperous, or if the Federal Reserve
unilaterally decides to raise interest rates, the price of both long term bonds and high
dividend paying stocks may fall. These events can come to pass, and so we ask: What
actions should we take today that allow you to maintain your current income and enhance
your long term wealth?
500 Lake Cook Road | Suite 210 | Deerfield, IL 60015 TEL 847.282.4225 FAX 847.572.1586 hightoweradvisors.com/lerner
Securities offered through HighTower Securities, LLC | Member FINRA/SIPC/MSRB | HighTower Advisors, LLC is a SEC registered investment advisor

Every investor poses a unique challenge. No one asset style or allocation fits every client.
We believe your portfolio should be designed to meet your personal needs for both current
income and longer term growth. We also believe that accounts should continue to hold a
portion of its funds in high dividend paying stocks and short to intermediate term corporate
bonds to satisfy the investors income needs. In addition, a portion of the portfolio should
be allocated to higher risk assets such as low dividend paying growth stocks and long term
bonds.
We believe that every holding should be purchased (and sold) with great care, and once a
security is purchased, it should be carefully monitored on a regular basis to be certain that it
continues to meet the high standards we set for every account we manage. We now review
the holdings we have every two weeks and plan to continue doing so in the future. We
encourage you to call us and set up a face to face meeting to discuss how we should best
proceed to help you meet your financial needs.

Sincerely,

Eugene Lerner
Managing Director, Partner

JR Gondeck
Managing Director, Partner

The Lerner Group is a group of investment professionals registered with HighTower Securities, LLC, member FINRA, MSRB and SIPC, and with HighTower Advisors,
LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower
Advisors, LLC.
This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment
opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment
opportunities referenced herein may not be suitable for all investors.
All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained
in this research is provided as general market commentary, it does not constitute investment advice. The Lerner Group and HighTower shall not in any way be
liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for
statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date
referenced. Such data and information are subject to change without notice.
This document was created for informational purposes only; the opinions expressed are solely those of The Lerner Group and do not represent those of
HighTower Advisors, LLC, or any of its affiliates.