Given that this is our third installment of our deep dive research into the trends impacting investors in 2023, you should be pretty familiar with the format.

Here are the main topics we covered in Parts 1 and 2:

• The top U.S. Economic factors influencing the market.
• The “good news” “bad news” conundrum.
• Expectations for the Federal Reserve.
• How we could avoid a recession with a “soft landing” for the economy.
• What the future looks like for the value of the U.S. Dollar—and what that means for earnings.
• How the war in Russia could impact markets.
• Which area of the world will continue to feel the impact of COVID-19.
• How the Yen will likely struggle in the year ahead.
• What the increase in coal production signals.
• What elevated lithium prices will mean for 2023 EV sales.
• And what may be in store for gold and precious metals.

We hope that you have found this information useful and valuable. If you missed it, or need a refresher on what we’ve covered, you can view the full details here.

Today, we’re going to cover eight more market trends that are impacting investors this year.
This installment will cover inflation, interest rates, and what expectations are priced into the market. We’ll wrap up with a look at the energy industry and the three specific developments to watch in this industry in 2023.

And remember, we’re releasing this research as quickly as it is completed, and we will email it to you immediately.

Once again let’s dive right in…

8 More Predictions for 2023

Prediction #13: Inflation Continues to Decelerate

According to Bryan Perry, the Senior Director with Navellier Private Client Group, inflation will calm down and dip closer to the Federal Reserve’s target level of 2% in 2023—and we could continue to see inflation cool in Europe, too.

“Some of the root causes responsible for the spike in inflation, namely supply chain disruptions, soaring commodity prices, and elevated shipping costs, have all eased materially from a year ago. In supply chain circles battered by more than two years of upheaval, the word ‘normal’ is creeping into the outlook for 2023. In the latest Logistics Managers’ Index, for instance, we read: ‘September’s future predictions hint at normalization and a return to business as usual over the next year.’

It has also been reported that ‘someone above’ must give a hoot about Europe, because that region has effectively skirted tough winter conditions that were as warm as any in recent memory, bringing huge relief from the threat of gut-wrenching heating and power bills for businesses and consumers alike.

What was a highly anticipated inflationary hyper-catalyst (frozen Europe) never really materialized.

Although still high, inflation across Europe dropped for the second-consecutive month in December, according to preliminary data from Eurostat, the European statistics agency. Eurozone annual inflation was down to 9.2% year-on-year in December from 10.1% in November, finally dropping from the realm of double digits, reached for the first time in October, when it surged to a 41-year high of 11.1%.

In yet another positive development, commodity prices are easing off the peak levels of May 2022. Although up from the low of September 2022, due to the anticipated reopening of China, prices for most commodities, especially in the agricultural sector, have stabilized, even as the Ukraine war continues.”[1]

Graphs are for illustrative and discussion purposes only.
Please read important disclosures at the end of this commentary.

Prediction #14: Treasury Yields Moderate and Dip Lower

Treasury yields have continued to their dramatic decline since peaking early in the fourth quarter of 2022. In fact, the 10-year Treasury yield has dropped nearly 13% from its high of 4.25% in late October to about 3.85% on February 17, 2023. That’s a huge move, folks! Yet, at the same time, the Fed funds rate has risen more than 10-fold since last April, and it now sits at a range between 4.5% and 4.75%.

The fact is that Treasury yields respond instantly to economic data—and we saw this play out in the wake of the shocking December retail sales report and the latest PPI data. Treasury yields declined substantially, with the 10-year Treasury yield slipping below 3.4% in mid-January.

The disparity between Treasury yields and market rates can’t last forever, as the Fed never wants to fight market rates.

Prediction #15: Market Volume Increases

As 2022 drew to a close, the stock market was victim to seasonally light trading volume. Thin market conditions leave stocks susceptible and more easily impacted by rumors and flashy headlines, which is why we saw wild swings in the final trading weeks of the year. Unfortunately, the market remains fairly illiquid at the start of a New Year, with many folks still on extended holidays.

But as these folks returned to Wall Street in January, liquidity improved—and in turn, we’ve seen more buying pressure. Jason Bodner reports…

“While it’s true that the S&P 500 fell nearly 6% in December, it still ended the fourth quarter north of +7%.

What caught my eye is what is happening under the surface of those aggregate numbers. Here’s the bottom line: We’ve seen increased buying and decreased selling uniformly across the market and sectors.

Let’s start with the Big Money Index (BMI), which is the simplest visual cue of how money has been moving. It’s a 25-day moving average of all buying and selling. When the blue line trends up, it means inflows. As you can see, October through mid-December was a clear uptrend. After nearly kissing overbought territory, the index pulled back. But recent action in January shows a resuming trend upward:

Graphs are for illustrative and discussion purposes only.
Please read important disclosures at the end of this commentary.

Overall market buying doesn’t necessarily mean balanced general buying. Naturally, it could be focused on only one sector, like last January when only energy was under accumulation. But that’s simply not the case this year… buying has been nicely distributed across the sectors. It’s not a perfect distribution, but a positive balance.

That’s the big new positive in 2023, so far—evenly-distributed love among sectors.”[2]

Prediction #16: Stock Market Ready to Launch

Well, we’ve already discussed how inflation is moderating and Treasury yields are trending lower—both of which have Bryan Perry convinced that the market is ready to launch higher. On January 18, 2023 he states;

“In my opinion, the green light for the market, and all the indexes, to pivot higher and commence a new broad-based uptrend, will be when the annual rate of inflation is at a lower level than that of short-term Treasury yields. At present, the yield on the 1-yr Treasury Bill is 4.92% whereas the Consumer Price Index (CPI) on a year-over-year basis, was +6.5% in December, and core-CPI was up 5.7%.

Inflation is decelerating and is now showing up in the labor statistics with initial weekly jobless claims and continuing jobless claims rising to levels last seen in February 2021. As the Fed is targeting wage inflation as a primary catalyst, this latest report is a move in the right direction, in terms of Fed policy. Food, energy, and home prices are coming down, but rents and professional service costs remain elevated.

My position is that when the Core PCE and Core CPI get down to 5.0% and 1-year Treasury Bills yield 5.25%, the market will view this as a “lift off” for growth stocks that occupy such big weightings in the indexes. But in all reality, if the market even senses that these two data points are going to intersect at the 5.0% level, it will likely be “go-flight” for the bulls and time to get fully invested in the leadership stocks.”[3]

Prediction #17: Small- and Mid-Cap Stocks Set to Outperform

Small- and mid-cap stocks have attracted a lot of attention to start the year, which, as you may know, is not unusual. Small- and mid-cap stocks tend to outperform between November and April, thanks in part to the “January Effect.” It’s simply a seasonally strong time of year for smaller-cap stocks.

I’m here to tell you this strength should continue throughout 2023, as money is being reshuffled.

Consider this: Back in March 2000, the top 10 tech stocks in the S&P 500 actually accounted for 54% of the index. I know that some folks don’t realize how concentrated the S&P 500 can get in only a few stocks, but it’s happened time and time again. Most recently, we saw this happen again with the FAANG stocks (and other related tech stocks), and their bubble was pricked last year.

Now, some of these stocks will bounce back and rally. But others will crash and burn. The fact is that when tech bubbles are pricked, it usually takes several years for the overall tech sector to recover. It took seven years after the tech bubble burst after March 2000. So, during this seven-year period, the tail end (smaller-cap stocks) did better than the top end (larger-cap stocks). Essentially, the “tail was wagging the dog.”

So, what I’m trying to tell you is that I expect smaller-cap, domestic stocks to do better than large-cap multinationals for at least two years (possibly seven!).

Top Energy Expectations for 2023

Prediction #18: Biden Administration Stops Draining the Strategic Petroleum Reserve

The Biden administration drained the Strategic Petroleum Reserve (SPR) by releasing one million barrels of oil per day for 200 days in 2022. As a result, the SPR is now sitting at its lowest level since 1980. The new Republican House is expected to be very critical and halt the releases from the SPR in 2023.

In fact, the House of Representatives already voted 331 to 97 to stop the Biden Administration from selling crude oil from the SPR to China or Chinese-owned companies. This is the first step that the House is taking to ban the Biden Administration from further draining the SPR to manipulate crude oil prices. Now, it is time for the U.S. to start to replenish these reserves.

Prediction #19: Energy Prices Stabilize and Rise

With releases from the SPR ending, crude oil prices are expected to steadily rise, especially as seasonal demand picks up in the Spring. Bloomberg TV had multiple experts discuss how high crude oil prices can go without the one million barrel per day release from the SPR. The consensus was that crude oil could reach $100 per barrel in the upcoming months and up to $120 per barrel was possible during peak summer demand.

But this isn’t the only reason that crude oil prices are headed higher…

With China reopening its economy, worldwide crude oil demand is anticipated to reach new records—and in turn, boost crude oil prices. The International Energy Agency (IEA) expects crude oil demand to rise 1.9 million barrels a day and reach a record 101.7 million barrels a day. However, new global crude oil production is forecast to rise by one million barrels per day. So, the IEA expects very tight crude oil supplies and higher crude oil prices in 2023.[4]

In addition, natural gas production in the U.S. recently rose to record levels, due partly to active drilling in the Haynesville Basin in Louisiana and Texas. Natural gas exports are now at an all-time record due to liquified natural gas (LNG) exports. Although natural gas prices are currently low due to abnormally warm winter weather in Europe and the U.S., Southern California natural gas prices remain almost five times higher due to limited pipeline capacity.

A Freeport LNG terminal has been shut down since June after a fire, and that caused natural gas inventories to rise and spot prices to fall. However, this important LNG terminal on the Gulf Coast in South Texas restarted recently. This great news and will help natural gas prices firm up.

Overall, crude oil and natural gas prices are anticipated to resume their climbs higher and remain elevated for the foreseeable future.

Prediction #20: Energy Stocks Should Have the Best Earnings of 2023

With robust crude oil demand and energy prices set to rise, crude oil and natural gas companies are lining up to continue to have the best earnings growth of all S&P 500 sectors. In fact, outside of energy (and agriculture), the other S&P 500 sectors are forecast to post deteriorating earnings.

According to FactSet, the energy sector achieved 57.7% annual earnings growth in the fourth quarter, 2022, making it the biggest positive contributor to the S&P 500’s overall earnings. But even with this eye-popping earnings growth in the energy sector, the S&P 500 still reported a more than 5% decline in earnings for the fourth quarter.[5]

Graphs are for illustrative and discussion purposes only.
Please read important disclosures at the end of this commentary.

Watch Your Inbox

The journey to reveal the 23 must-know trends impacting investors this year is nearing the end. In fact, we’re putting the finishing touches on the final three predictions as we speak.

Please watch your inbox in the next day or so for the final set of market trends impacting investors in 2023.

As a reminder…

Get a No-Obligation Portfolio Review

If you would like to have a conversation about how major market factors could impact your portfolio, our Private Client Group can provide you with a personal, one-on-one, overall review of your entire portfolio. We can assess your current investments and ensure they are in-line with your level of risk and your specific investment goals.

Contact us today and let’s get started.

All the best to you and yours,

Louis Navellier
Chief Investment Officer
Navellier & Associates, Inc. │ Private Client Group

[1] https://navellier.com/1-24-23-u-s-stock-market-enters-a-fog-of-uncertainty/
[2] https://navellier.com/1-18-23-whats-new-so-far-in-2023/
[3] https://navellier.com/1-4-23-rally-to-resume-when-inflation-sinks-to-1-year-t-bill-yield/
[4] https://www.iea.org/reports/oil-market-report-january-2023
[5] “https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_020323A.pdf

IMPORTANT DISCLOSURES

Any holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and it should not be assumed that investments in securities identified and described were or would be profitable. Performance results presented herein do not necessarily indicate future performance. Results presented include reinvestment of all dividends and other earnings. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. Investment in fixed income components has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s shares, when redeemed, may be worth less than their original cost. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities mentioned in this report.

This report is for informational purposes and is not to be construed as an offer to buy or sell any financial instruments and should not be relied upon as the sole factor in an investment making decision. The views and opinions expressed are those of Navellier at the time of publication and are subject to change. There is no guarantee that these views will come to pass. As with all investments there are associated inherent risks. Please obtain and review all financial material carefully before investing. Although the information in this communication is believed to be materially correct, no representation or warranty is given as to the accuracy of any of the information provided. Certain information included in this communication is based on information obtained from sources considered to be reliable. However, any projections or analysis provided to assist the recipient of this communication in evaluating the matters described herein may be based on subjective assessments and assumptions and may use one among alternative methodologies that produce different results. Accordingly, any projections or analysis should not be viewed as factual and should not be relied upon as an accurate prediction of future results. Furthermore, to the extent permitted by law, neither Navellier nor any of its affiliates, agents, or service providers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this communication or for any decision based on it. Opinions, estimates, and forecasts may be changed without notice. The views and opinions expressed are provided for general information only.

The S&P 500 Index consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock ’s weight in the index proportionate to its market value. The reported returns reflect a total return for each quarter inclusive of dividends. Presentation of index data does not reflect a belief by Navellier that any stock index constitutes an investment alternative to any Navellier equity strategy presented in these materials, or is necessarily comparable to such strategies and an investor cannot invest directly in an index. Among the most important differences between the indexes and Navellier strategies are that the Navellier equity strategies may (1) incur material management fees, (2) concentrate investments in relatively few ETFs, industries, or sectors, (3) have significantly greater trading activity and related costs, and (4) be significantly more or less volatile than the indexes. All indexes are unmanaged and performance of the indices includes reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index.FactSet Disclosure: Navellier does not independently calculate the statistical information included in the attached report. The calculation and the information are provided by FactSet, a company not related to Navellier. Although information contained in the report has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed.

The report and the related FactSet sourced information are provided on an “as is” basis. The user assumes the entire risk of any use made of this information. Investors should consider the report as only a single factor in making their investment decision. The report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, disseminated or used to create any financial products. All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index. Past performance is no guarantee of future results.

Mapsignals Disclosure: Jason Bodner is a co-founder and co-owner of Mapsignals.com, a Developed Factor Model for isolating outlier stocks using its proprietary quantitative equity selection methodology. Mapsignals was founded in 2014. Data used by Mapsignals, for periods prior to its founding in 2014, is data derived from Factset. Mr. Bodner is an independent contractor who is occasionally hired to write articles and provide his editorial comments and opinions. Mr. Bodner is not employed by Navellier & Associates, Inc., or any other Navellier owned entity. The opinions and statements made in this article are those of Mr. Bodner and not necessarily those of any other persons or entities. Jason Bodner is a co-founder and co-owner of Mapsignals. Mr. Bodner is an independent contractor who is occasionally hired by Navellier & Associates to write an article and or provide opinions for possible use in articles that appear in Navellier & Associates weekly Market Mail. Mr. Bodner is not employed or affiliated with Louis Navellier, Navellier & Associates, Inc., or any other Navellier owned entity. The opinions and statements made here are those of Mr. Bodner and not necessarily those of any other persons or entities. This is not an endorsement, or solicitation or testimonial or investment advice regarding the BMI Index or any statements or recommendations or analysis in the article or the BMI Index or Mapsignals or its products or strategies.

The views and opinions expressed do not constitute specific tax, legal, or investment or financial advice to, or recommendations for, any person, and the material is not intended to provide financial or investment advice and does not take into account the particular financial circumstances of individual investors. Before investing in any investment product, investors should consult their financial or tax advisor, accountant, or attorney with regard to their specific situation.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates product.

1. Compliance Statement – Navellier & Associates Inc. claims compliance with the Global investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Navellier & Associates Inc. has been independently verified for the periods January 1, 1995 through December 31, 2020. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. The Navellier Large Cap Growth Composite has had a performance examination for the periods September 1, 1998 through December 31, 2020. The verification and performance examination reports are available upon request.”

2. Definition of Firm – Navellier & Associates, Inc. is a registered investment adviser established in 1987. Registration does not imply a certain level of skill or training. Navellier & Associates, Inc. manages a variety of equity assets for primarily U.S. and Canadian institutional and retail clients. The firm’s list of composite descriptions as well as information regarding the firm’s policies for valuing investments, calculating performance, and preparing GIPS reports are available upon request.

3. Composite Description – The composite creation date is March 31, 2005. As of October 1, 2019, the Navellier Large Cap Growth strategy was redefined to include both wrap and institutional accounts to more broadly market the strategy. Prior to this date, only wrap accounts were included in the composite. The Large Cap Growth Composite name changed from the Large Cap Growth Wrap Composite to the Large Cap Growth Composite. The Navellier Large Cap Growth Composite includes all discretionary Large Cap Growth equity accounts that are managed with similar objectives for a full month, including those accounts no longer with the firm. The strategy is designed for aggressive investors seeking capital appreciation from well established companies and seeks to achieve the highest possible returns while controlling risk. The strategy invests in U.S. listed securities with market capitalizations greater than $1 billion. At any given time, the strategy may hold up to 15% in American Depositary Receipts (ADRs). Typically, the strategy invests in approximately 40-50 stocks that pass Navellier’s stringent quantitative and fundamental criteria. Performance figures that are net of fees take into account advisory fees, wrap fees, foreign withholding tax and any brokerage fees or commissions that have been deducted from the account. “Pure” gross-of-fees returns do not reflect the deduction of any trading costs, fees, or expenses, and are presented only as supplemental information. Performance results are total returns and include the reinvestment of all income, including dividends. The composite inception date is September 1, 1998. Valuations and returns are computed and stated in U.S. Dollars.

4. Management Fees – The management fee schedule for accounts ranges from 0.30% to 1.25% of assets under management; however, some incentive fee, fixed fee, and fulcrum fee accounts may be included. Fees are negotiable, and not all accounts included in the composite are charged the same rate. Wrap fee schedules are provided by independent wrap sponsors and are available upon request from the respective wrap sponsor. Wrap fees generally range from 100 to 200 basis points and include custody, trading expenses, and other expenses associated with the management of the account. There are zero commissions accounts included in the composite. The client is referred to the firm’s Form ADV Part 2A for a full disclosure of the fee schedule. Net performance is calculated using actual fees.

5. Composite Dispersion – If applicable, the dispersion of annual returns is measured by the standard deviation across asset-weighted portfolio level gross returns represented within the composite for the full year.

6. Benchmark – The primary benchmark for the composite is the Russell 1000® Growth Index. The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The secondary benchmark for the composite is the S&P 500 Index, which measures the performance of the 500 leading companies in leading industries of the U.S. economy, focuses on the large cap segment of the market, with approximately 75% coverage of U.S. equities. These indices are considered reasonable measures of the performance of the large cap, growth oriented U.S. companies. The returns for the Russell 1000® Growth and S&P 500 indices include the reinvestment of any dividends. The asset mix of large cap growth equity accounts may not be precisely comparable to the presented indices. Presentation of index data does not reflect a belief by the Firm that the Russell 1000® Growth or S&P 500 indices, or any other index, constitutes an investment alternative to any investment strategy presented in these materials or is necessarily comparable to such strategies.

7. General Disclosure – GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. The three-year annualized standard deviation measures the variability of the gross composite and the benchmark returns over the preceding 36-month period. Actual results may differ from composite results depending upon the size of the account, custodian related costs, the inception date of the account and other factors. Past performance does not guarantee future results. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings. The securities identified and described do not represent all of the securities purchased, sold, or recommended for client accounts. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report. A list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months is available upon request.

1. Compliance Statement – Navellier & Associates Inc. claims compliance with the Global investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Navellier & Associates Inc. has been independently verified for the periods January 1, 1995 through December 31, 2020. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. The Navellier Power Dividend Composite has had a performance examination for the periods January 1, 2015 through December 31, 2020. The verification and performance examination reports are available upon request.”

2. Definition of Firm – Navellier & Associates, Inc. is a registered investment adviser established in 1987. Registration does not imply a certain level of skill or training. Navellier & Associates, Inc. manages a variety of equity assets for primarily U.S. and Canadian institutional and retail clients. The firm’s list of composite descriptions as well as information regarding the firm’s policies for valuing investments, calculating performance, and preparing GIPS reports are available upon request.

3. Composite Description – The composite creation date is March 31, 2006. As of October 1, 2019, the Navellier Power Dividend strategy was redefined to include both wrap and institutional accounts to more broadly market the strategy. Prior to this date, only wrap accounts were included in the composite. The Power Dividend Composite name changed from the Power Dividend Wrap Composite to the Power Dividend Composite. The Navellier Power Dividend Composite includes all discretionary Power Dividend equity accounts and are managed with similar objectives for a full month, including those accounts no longer with the firm. The strategy is designed for aggressive investors seeking to capitalize on the best opportunities within the group of publicly traded companies that pay dividends. The strategy invests in U.S. listed securities with market capitalizations greater than $250 million that pay dividends. Statistical measures may be used in an attempt to identify unusual price movements in individual stock prices, which may result in higher-than-average turnover and cash positions for the portfolio. At any given time, the strategy may hold up to 15% in American Depositary Receipts (ADRs). Stocks in the strategy typically exhibit positive return on equity and positive return on assets, usually have higher free cash flow than what they pay in dividends, and are usually growing dividends faster than the rate of inflation. Typically, the strategy invests in approximately 15 to 30 stocks. The strategy may invest in smaller capitalization stocks that may trade fewer shares than larger capitalization stocks; the liquidity risk among these types of stocks may increase the strategy’s risk. Performance figures that are net of fees take into account advisory fees, wrap fees, foreign withholding tax, and any brokerage fees or commissions that have been deducted from the account. “Pure” gross-of-fees returns do not reflect the deduction of any trading costs, fees, or expenses, and are presented only as supplemental information. Performance results are total returns and include the reinvestment of all income, including dividends. The composite inception date is January 1, 2006. Valuations and returns are computed and stated in U.S. Dollars.

4. Management Fees – The management fee schedule for accounts ranges from 0.30% to 1.25% of assets under management; however, some incentive fee, fixed fee, and fulcrum fee accounts may be included. Wrap fee schedules are provided by independent wrap sponsors and are available upon request from the respective wrap sponsor. Wrap fees generally range from 100 to 200 basis points and include custody, trading expenses, and other expenses associated with the management of the account. There are zero commissions accounts included in the composite. The client is referred to the firm’s Form ADV Part 2A for a full disclosure of the fee schedule. Net performance is calculated using actual fees.5. Composite Dispersion – If applicable, the dispersion of annual returns is measured by the standard deviation across asset-weighted portfolio level gross returns represented within the composite for the full year.

6. Benchmark – The primary benchmark for the composite is the Russell 3000® Index. The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. The secondary benchmark for the composite is the Standard & Poor 500 Index (“S&P 500 Index”). The S&P 500 Index measures the performance of approximately 500 companies listed on U.S. stock exchanges selected by Standard & Poor. These indices are considered reasonable measures of the general performance of the broad U.S. equity market. The returns for the Russell 3000® and S&P 500 indices include the reinvestment of any dividends. The asset mix of Navellier Power Dividend equity accounts may not be precisely comparable to the presented indices. Presentation of index data does not reflect a belief by the Firm that the Russell 3000® or S&P 500 indices, or any other index, constitutes an investment alternative to any investment strategy presented in these materials or is necessarily comparable to such strategies. As of June 2012, the Russell 3000 Index is listed as the primary benchmark because it is a better representation of the investment strategy. The S&P 500 Index has replaced the Russell 1000 Index as the secondary benchmark.

7. General Disclosure – GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. The three-year annualized standard deviation measures the variability of the gross composite and the benchmark returns over the preceding 36-month period. Actual results may differ from composite results depending upon the size of the account, custodian related costs, the inception date of the account and other factors. Past performance does not guarantee future results. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings. The securities identified and described do not represent all of the securities purchased, sold, or recommended for client accounts. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report. A list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months is available upon request.

I acknowledge and represent that Navellier & Associates, Inc. is authorized and has my consent to call me at the phone number I provided in the registration.

Please note that Navellier & Associates and The Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates product.

I acknowledge that I have read the Disclosure Language above. Also I give Navellier and Associates, Inc. express written consent to contact me with any offers or promotions via the phone number listed, which may be a cell phone, business line, or residential line (including use of automated dialing equipment and pre-recorded calls). This consent is not a condition of receiving services from Navellier & Associates Inc.

Past performance does not guarantee future results. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. Investment in fixed income components has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s shares, when redeemed, may be worth less than their original cost.

IMPORTANT NEWSLETTER DISCLOSURE: The hypothetical performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier’s Growth Investor, Louis Navellier’s Breakthrough Stocks, Louis Navellier’s Accelerated Profits, and Louis Navellier’s Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters reported hypothetical performances should be considered mere “paper” or proforma hypothetical performance results and are not actual performance of real world trades. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier Investment Products’ portfolios and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters contain hypothetical performance that do not include transaction costs, advisory fees, or other fees a client might incur if actual investments and trades were being made by an investor. As a result, newsletter performance should not be used to evaluate Navellier Investment services which are separate and different from the newsletters. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or hypothetical Newsletter performance claims, (which are calculated solely by Investor Place Media and not Navellier) should be referred to InvestorPlace Media, LLC at (800) 718-8289.