Download September 30, 2013 Dear Friends, Large cap companies generated

September 30, 2013
Dear Friends,
Large cap companies generated higher returns than many other security groups during the first eight months
of this year. However, over the past several weeks a new rate of return pattern began to emerge: small cap
companies generated higher returns than large cap companies. We believe this new trend is going to
continue for some time, and we would like you to be in a position to take advantage of this opportunity. To
accomplish this, we plan to incorporate a new investment strategy into the Equity Growth portion of your
total managed account.
The name of this new investment strategy will be “Micro-Cap”.
We believe there are several reasons why our Micro-Cap investment strategy belongs in your Equity Growth
portfolio. Business expenditures for plant and equipment, as well as consumer outlays for automobiles and
housing are increasing. The economy is expanding, and micro-cap companies are in a position to experience
a high percentage change in sales and profits. Few serious investors think a major economic recession is
likely to occur soon. The risk tolerance of investors has increased, and we think many are looking for the
type of investment opportunities Micro-Cap stocks provide.
In addition to these business considerations, current monetary policy is also favorable for Micro Cap
securities. Last month the dispute between those who favor high interest rates to deter potential inflation and
those who favor low interest rates to stimulate further economic growth was resolved in favor of the low
interest rate advocates. The Federal Reserve announced that it would continue to buy $85 billion a month of
government securities and mortgages. The net effect of this policy decision is beneficial to the Micro-Cap
strategy because it increases the availability of funds to both the firms and their investors.
All of the companies we plan to buy in Micro-Cap have smaller capitalizations and lower market prices than
companies you now hold. This low price small cap Micro-Cap strategy will be rules based just as our other
investment strategies we manage for you. We intend to review our buy and hold list every two weeks and
companies no longer on the approved list will be sold from your portfolio.
We welcome your phone calls to discuss this addition to your Equity Growth portfolio, as well as other
investment topics on your mind. If you would like to receive these monthly letters as well as your purchase
and sale confirmations via e-mail rather than in hard copy form, please call and give us your correct your email address. Thank you for your continued support.
Sincerely,
Eugene Lerner
Managing Director, Partner
500 Lake Cook Road | Suite 210 | Deerfield, IL 60015 TEL 847.282.4225 FAX 312.962.3899 hightoweradvisors.com
Securities offered through HighTower Securities, LLC | Member FINRA/SIPC/MSRB | HighTower Advisors, LLC is a SEC registered investment advisor