The Rezny Wealth Report May 20, 2013

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1 Rezny Wealth Management, Ltd. Appropriate Change When Change Is Due There is a Difference...We Invite You to Experience It! The Rezny Wealth Report May 20, 2013 Brian C. Rezny, CFP/President, Rezny Wealth Management, Ltd. " Forethought we may have, undoubtedly, but not foresight." - Napoleon Bonaparte The Markets, Rezny Wealth Trend Indicators MTI s Returns Through 5/17/13* Price/ Yield YTD 1 year 3 year 5 year Standard & Poor s 500 1, % Year T Bond 3.16% Year T Bond 1.95% Oil $ Gold $1, Market Trend Indicators* Sector Signal Short Term MTI US S&P 500, SPY* Positive Intermediate MTI US S&P 500, SPY* Positive Long Term MTI US S&P 500, SPY* Positive Long Term MTI WORLD, EFA* Positive Long Term MTI EMERGING, EEM* Positive Long Term MTI COPPER, JJC* Negative Long Term MTI GOLD, GLD* Negative Long Term MTI US Long Gov.BondTLT* Positive (MTIs) can change signals at any time. This is not a recommendation to buy or sell any security, for informational purposes only. Read full disclosure.*

2 Market Direction Is Important Updated Chart of the S&P 500 and Secondary Signals Of our Four secondary indicators under our MTI: Relative Strength Index (RSI)-Positive Chaikin Money Flow (CMF)-Positive MACD-Negative-Positive Money Flow Index-MFI-Positive

3 In the News Economic Data Production in the US fell by the most in eight months, as output from factories, mines and utilities declined. On a positive note, consumer sentiment reached the highest level since July 2007, and the Conference Board s leading economic indicators rose to the highest in almost five years. The week before last was the busiest week for IPOs since December 2007, with 11 companies listed. American households increased their deleveraging with household debt in the first quarter of this year falling to $11.2 trillion the lowest level since Farming Debt Farmers could be slammed by debt in the next couple of years, according to a study from the Kansas City Federal Reserve. Today farm debt levels are low, but capital spending by farmers is at

4 record levels. The Department of Agriculture is expecting a 25% drop in farm income next year if that happens, farmers may start to tap into savings to keep up with equipment and land needs. The study also noted that in 2011 agriculture created $98.1 billion in farm income, and accounted for 1 out of every 12 jobs. In Europe France slipped back into recession, as the economy shrank -.2% in the first quarter of this year. The 17-nation euro zone continues to grapple with a recession, as growth shrank -.2% last quarter the sixth straight quarter of contraction. In Asia The Japanese economy expanded at the fastest pace in a year as consumer spending (which accounts for 60% of growth) and exports gained. GDP expanded 3.5% on a yearly basis in the last quarter, making it the fastest growing economy in the G7. Chinese banks are facing higher defaults, as bad loans increased for the sixth quarter in a row.

5 S&P estimates that Chinese corporate debt will surpass the US in the next couple of years. The ratings agency estimates that Chinese companies will need to borrow $18 trillion by 2017, while US companies will need $13 trillion. The Market The market gained for the fourth week in a row, with the Dow and the S&P 500 hitting new highs (again). For the week, the Dow ended up 1.56% and the S&P 500 finished up 1.98%. As of last week, 93% of S&P 500 companies have reported earnings, with 67% beating expectations and 24% coming in below. The Facebook IPO: One Year Later On May 18, 2012, Facebook went public in what was one of the most anticipated IPOs in history. The much-hyped IPO started as a frenzy then turned into a botched mass of confusion and cancelled orders because of gross mishandling by NASDAQ and then ended up a total flop. Shares were offered at $38. They opened at $40. And within ten market hours, they tanked. Four months later the stock bottomed out at $18. Now its spent the past few months middling around $27. Facebook, Inc.

6 When it released its first quarter results a couple of weeks ago, the company said that its active monthly users now total 1.1 billion up 23% form one year ago. And monthly mobile active users now total 751 million a 54% increase. With that, Facebook is the largest social network by a pretty wide margin. But blockbuster growth doesn t go on indefinitely. While 23% growth in monthly users is great, that rate has been slowing down since early last year. And while Facebook reported that total revenue increased 38% in the first quarter, total expenses climbed at a much faster 60%. At its debut, Facebook had a market cap of $104 billion. Today it has slipped to $63.2 billion. The stock wasted no time going from storied IPO to historic disappointment. A year ago I said I wouldn t buy it. I still wouldn t. How Are Americans Handling the Payroll Tax Hike? The payroll tax cuts that were in place in 2011 and 2012 were easy to adjust to. The cuts reduced taxes withheld from paychecks by 2%, and benefited almost 155 million US workers. A household earning $50,000 got to keep an extra $1,000 in their pocket.

7 That extra money was put to use. A recent survey out of the New York Fed found that the tax cuts led to a substantial increase in consumer spending and facilitated the consumer deleveraging process. On average, consumers spent 38% of the extra income. The rest went to paying off debt (33%) and savings (29%). And now consumers are readjusting after Congress allowed the tax cuts to expire at the end of last year as part of the fiscal cliff negotiations. Most workers around 79% - plan on cutting spending as a result of their lower income. Around 20% plan on reducing their savings. That means consumers are finding it a lot harder to get used to a smaller paycheck. Regardless of what they did with the extra money over the past two years, there is a disproportionate shift toward primarily reducing spending.

8 The survey concluded that the expiration of the tax cuts is likely to lead to a substantial reduction in spending as well as contribute to a slowdown or possibly a reversal in the paydown of consumer debt. In other words, it was very easy to expand into that extra 2%...but much more painful to tighten up when it evaporated. Call us, it can t hurt to talk and get a second opinion* You would benefit from a Consultation if: You want to Avoid outliving your money during retirement You want to Grow and Protect your Investments & Retirement You are Questioning the advice or lack of advice you are getting You want to Sleep well at night, You want less stress over your investments and You want to enjoy Retirement with your family Rezny Wealth Management, Ltd. Fee-Only Money Management, Fiduciary Standard of Care In Your Best Interest There is a Difference...We Invite You to Experience It! Best regards, Brian C. Rezny, CFP President and Chief Investment Officer *For qualified investors, Minimum of $500,000 in investable assets to start & you are considering the benefits of professional investment management services offered by Rezny Wealth Management

9 Investment Strategy Risk Management Strategy Active Money Management Office locations: Corporate Head Quarters: 2287 Foxboro Lane, Naperville, IL Summerlin Commons Blvd., Suite 209, Fort Myers, FL Panther Lane, Suite 395, Naples, FL Ponce de Leon Blvd., Suite 470, Coral Gables, FL NW Executive Center Dr., Suite 100, Boca Raton, FL W. Montello, Montello, WI Phone: (800) or (630) Fax: (630) Visit our web site: DISCLOSURES *THIS REPORT IS FOR INFORMATIONAL, EDUCATIONAL AND ENTERTAINMENT PURPOSES ONLY AND SHALL NOT BE CONSTRUED TO CONSTITUTE INVESTMENT, OR LEGAL ADVICE. NOTHING CONTAINED HEREIN SHALL CONSTITUTE A SOLICITATION, RECOMMENDATION OR ENDORSEMENT TO BUY OR SELL ANY SECURITY OR OTHER FINANCIAL INSTRUMENT. INVESTMENT FUNDS MANAGED BY REZNY WEALTH MANAGEMENT, LTD. (RWM) MAY HAVE POSITIONS IN THE SECURITIES OF COMPANIES REFERENCED IN THIS PRESENTATION. RWM HAS NO OBLIGATION TO UPDATE THE INFORMATION CONTAINED HEREIN AND MAY MAKE INVESTMENT DECISION THAT ARE INCONSISTENT WITH THE VIEWS EXPRESSED IN THIS PRESENTATION. WE MAKE NO REPRESENTATION OR WARRANTIES AS TO THE ACCURACY, COMPLETENESS OR TIMELINESS OF THE INFORMATION, TEXT, GRAPHICS OR OTHER ITEMS CONTAINED IN THIS PRESENTATION. RWM AND ITS AFFILIATES EXPRESSLY DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS IN, OR THE MISUSE OR MISINTERPRETATION OF, ANY INFORMATION CONTAINED IN THIS PRESENTATION. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND FUTURE RETURNS ARE NOT GUARANTEED. NO PORTION OF THIS PRESENTATION MAY BE COPIED, REPRODUCED, REPUBLISHED OR DISTRIBUTED IN ANY WAY WITHOUT THE EXPRESS WRITTEN CONSENT OF RWM. MATERIAL DISCUSSED IS MEANT FOR GENERAL ILLUSTRATION AND/OR INFORMATIONAL PURPOSES ONLY AND IT IS NOT TO BE CONSTRUED AS TAX, LEGAL, OR INVESTMENT ADVICE. ALTHOUGH THE INFORMATION HAS BEEN GATHERED FROM SOURCES BELIEVED TO BE RELIABLE, PLEASE NOTE THAT INDIVIDUAL SITUATIONS CAN VARY THEREFORE; THE INFORMATION SHOULD BE RELIED UPON WHEN COORDINATED WITH INDIVIDUAL PROFESSIONAL ADVICE. *AN INDEX IS A PORTFOLIO OF SPECIFIC SECURITIES (COMMON EXAMPLES ARE THE S & P, DJIA, NASDAQ), THE PERFORMANCE OF WHICH IS OFTEN USED AS A BENCHMARK IN JUDGING THE RELATIVE PERFORMANCE OF CERTAIN ASSET CLASSES. INDEXES ARE UNMANAGED PORTFOLIOS AND INVESTORS CANNOT INVEST DIRECTLY IN AN INDEX. THE STANDARD & POOR'S 500 (S&P 500) IS AN UNMANAGED GROUP OF SECURITIES CONSIDERED TO BE REPRESENTATIVE OF THE STOCK MARKET IN GENERAL. *PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. *SHORT SELLING IS AN ADVANCED TRADING STRATEGY INVOLVING POTENTIALLY UNLIMITED RISKS, AND MUST BE DONE IN A MARGIN ACCOUNT. MARGIN TRADING INCREASES YOUR LEVEL OF MARKET RISK. FOR MORE INFORMATION PLEASE REFER TO YOUR FIRMS ACCOUNT AGREEMENT AND THE MARGIN RISK DISCLOSURE STATEMENT. *FIXED INCOME INVESTMENTS ARE SUBJECT TO VARIOUS RISKS INCLUDING CHANGES IN INTEREST RATES, CREDIT QUALITY, INFLATION RISK, MARKET VALUATIONS, PREPAYMENTS, CORPORATE EVENTS, TAX RAMIFICATIONS AND OTHER FACTORS. ANY FIXED INCOME SECURITY SOLD OR REDEEMED PRIOR TO MATURITY MAY BE SUBJECT TO A SUBSTANTIAL GAIN OR LOSS. *MARKET TREND INDICATORS (MTIS) CAN CHANGE SIGNALS AT ANYTIME. THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY, FOR EDUCATIONAL PURPOSES ONLY. *MARKET TREND INDICATOR (MTI) S&P 500, SPY IS USED* US LONG GOVERNMENT BOND, TLT IS USED* WORLD STOCKS, EFA IS USED* EMERGING MARKETES, EEM IS USED* GOLD, GLD IS USED*, COPPER, JJC IS USED* (MTIS) CAN CHANGE SIGNALS AT ANYTIME. *The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of Rezny Wealth Management, Ltd, herein (RWM) may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Investors should always consult an investment professional before making any investment. *Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do not ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither RWM, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided. The analysis provided is based on both technical and fundamental research and is provided ''as is'' without warranty of any kind, either expressed or implied. Although the information contained is derived from sources, which are believed to be reliable, they cannot be guaranteed. RWM is registered with the U.S. Securities and Exchange Commission as an Investment Adviser. *The S&P 500 is a stock market index containing the stocks of 500 large-cap corporations, most of which are US companies. The index is the most notable of the many indices owned and maintained by Standard & Poor's, a division of McGraw-Hill. S&P 500 is used in reference not only to the index but also to the 500 companies that have their common stock included in the index. You can t invest directly into an index. *BEFORE MAKING ANY INVESTMENT DECISION, AN INVESTOR SHOULD CONSULT WITH A FINANCIAL PROFESSIONAL TO DETERMINE IF THE INVESTMENT IS APPROPRIATE, OR CONDUCT THEIR OWN DUE DILIGENCE BEFORE MAKING ANY FINANCIAL DECISIONS. ALL INVESTMENTS INVOLVE RISK, INCLUDING THE POTENTIAL LOSS OF PRINCIPAL INVESTED. Rezny Wealth Management may hold investments in above-mentioned securities; positions can change at any time. Rezny Wealth Management, Ltd. A Fee-Only Registered Investment Advisor Fiduciary Standard of Care In Your Best Interest Copyright Rezny Wealth Management, Ltd. All rights reserved.