MARKET OUTLOOK 4Q 2021:

A GROWTH STRATEGY TO NAVIGATE MARKET VOLATILITY

The Wall Street Bears have been more focused on selling fear in recent months than telling the real story of what’s happening on Wall Street. These bearish market pundits would have you believe that earnings momentum has stalled, that growth stocks are dead in the water and that the stock market is heading for a tumble. But nothing could be further from the truth!

In this special report, Navellier & Associates will pull back the curtain and reveal why we believe the next three to four months should be impressive ones for the stock market overall and for growth stocks in particular. In fact, the stock market could be 30% higher by Memorial Day 2022!

Authored by Louis Navellier,
Chief Investment Officer, Navellier & Associates, Inc.

Co-Authored by Bryan Perry, Gary Alexander, Ivan Martchev, and Jason Bodner
Contributors to Navellier & Associates’ weekly Marketmail newsletter

NOVEMBER 2021

Navellier & Associates, Inc.
One East Liberty, Suite 504
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Stocks’ performance in the third quarter was nothing to write home about.

Actually, the final minutes of the third quarter were pretty dismal. Stocks across the board—large caps and small caps alike—ultimately ended the month of September lower. The S&P 500 and Dow declined 4.8% and 4.3%, respectively, while the small-cap Russell 2000 slipped 3.1% lower.

>Many factors played into the late-quarter’s decline, including inflationary fears, China’s growing debt crisis with Evergrande on the verge of default, slowing global growth, and surging energy prices. Many Wall Streeters are now wondering if it’s game over for stocks in the near term, and some are even claiming it’s time to pack it up and go home.

Disclosure: Navellier & Associates does not own China Evergrande Group (EGRNF), in managed accounts. Louis Navellier does not own China Evergrande Group (EGRNF) personally.

But I believe the bearish pundits, market experts, and talking heads are all wrong. They’re too busy selling fear and not the truth. Here’s the truth…

The fourth quarter is historically the strongest three months of the year for the stock market.

The reality is that even with the market’s dismal performance in September, stocks are still gearing up for a strong finish to the year. In fact, in the years when the S&P 500 traded lower in September but was still higher year-to-date, the index continued its climb through year-end.

The folks at Bespoke recently noted that the S&P 500 has slipped lower 25 times in September, yet still maintained positive gains through the end of the third quarter. And in these instances, the S&P 500 posted an average 2.79% gain in the fourth quarter. As I noted above, the S&P 500 dropped 4.8% in September, but the index was still up nearly 15% year-to-date. So, if the market follows historical precedence, we could end 2021 on a higher note.

I should also add, according to Bespoke, the Dow has rallied an average 4.5% in the fourth quarter over the past 20 years. That compares to a combined 1.2% rise in the first three quarters of the year. Last year, the Dow soared an incredible 10.2% in the fourth quarter. The S&P 500’s performance is equally impressive: the index has posted an average gain of 3.95% in the fourth quarter since 1950. In 2020, the S&P 500 surged nearly 11% in the fourth quarter.

Essentially, what happens in the fall is that consumers cheer up as the holidays approach. When we gather with family and friends during Thanksgiving and the other holidays, consumer sentiment naturally rises. This year, there could even be more holiday cheer during Thanksgiving and the Christmas season, with crowds filling football stadiums and folks able to visit families again.

All of this bodes well for the stock market. When consumer sentiment rises, investor sentiment also improves, which is why year-end rallies are common.

Additionally, there is a lot of year-end pension funding that typically starts around the Thanksgiving holiday, which includes gift purchases for others around Christmas, and then it carries over into the New Year.

Simply put, the final months of the year should be very strong ones for the stock market—and this year-end strength will likely serve as a launching pad for 2022.

A Fourth Quarter to Remember

In the words of Gary Alexander, a Senior Writer at Navellier & Associates, “The fourth quarter—like the conclusion of sporting events or Broadway plays—is where the drama lies. Similarly, the third quarter is where the doldrums occur, making the fourth-quarter’s performance all the more refreshing.”

Well, the stunning start to the fourth quarter has certainly been refreshing, as October kicked off the final quarter of the year on the right foot. In fact, despite all the stock market’s fluctuations—remember all those wild, triple-digit swings on the Dow in early October?—the broader indices all trekked higher. The S&P 500, Dow, and NASDAQ all ended the month of October up more than 5%.

The fact is the fourth quarter commenced with another spectacular earnings season. According to FactSet, the S&P 500 posted average earnings growth of 30% and average sales growth of 15.1% for the third quarter. Equally impressive, 80% of companies topped analysts’ earnings estimates for the quarter, with an average earnings surprise of 14.7%. I should also add that 83% of S&P 500 companies exceeded analysts’ sales forecasts. [1]

Now, aside from the stunning third-quarter results that ignited stocks in the first month of the fourth quarter, this year has something else going for it. But I’m getting ahead of myself. First, consider the table below with all the numbers for the S&P 500 fourth quarters in the last 20 years—and then I’ll let Alexander explain what makes this year so special.

The stellar fourth-quarter performance of the stock market over the last 20 years is all the more amazing since it includes controversial election years like 2000 (Gore vs. Bush), 2008 (Obama vs. McCain during the financial crisis and deep market crash), and 2016 (Clinton vs. Trump), the controversial 2020 election just past, as well as the 24% market drop in the fourth quarter of 2018. That’s a lot of bad fourth quarters.Look at those numbers above again and tell me one thing they all had in common…

(Hint: Were they even or odd?)

Here’s where the numbers begin to taste better. In years divided by four, we hold Presidential elections. Most of the last six such elections have been highly controversial, causing a disturbed stock market in their wake. In the other even-numbered years, we hold Congressional elections, where every House seat is up for grabs as well as one third of Senate seats, often resulting in a repudiation of the President’s Party.

As a result, the even-numbered fourth quarters since 2000 have averaged tiny (0.6%) gains, while the odd-numbered fourth quarters averaged gains of nearly 7%. The last time I checked 2021 is… odd. In the 11 election years, the fourth quarter rose seven times and fell four times for a net average gain of just 0.6%. In contrast, the fourth quarter S&P performance in the last 10 years ending in odd numbers—non-election years—averaged +6.75% with only one small drop, making odd-numbered years about 11 times better than election years in this century.

That makes me feel better about entering this final quarter.

The Stock Trader’s Almanac has also supported Alexander’s outlook that the fourth quarter of 2021 will be a spectacular one for the stock market. Since 1950, the S&P 500 has posted average gains of about +3.95% in the fourth quarter. To put this into perspective, the S&P 500 climbed an average of +4.64% in the first nine months of the year during the same time period.

Clearly, we’re in the midst of the seasonally strong time of year—and there’s one bucket of stocks I expect will exhibit tremendous relative strength in the upcoming months, especially since the near-term market lows are in…

Stock Market Bottoms; Growth Back in Favor

After the bumpy summer months and a dismal September, the stock market surged on the first trading day of the fourth quarter and put in a firm bottom in the early part of October. How can we be certain?

Let’s consider research from the September 28 article by Jason Bodner, who writes Sector Spotlight in the Navellier & Associates weekly Marketmail and who is anticipating that the stock market will continue to climb higher.

First, what we need to understand is that the S&P 500 is cap weighted. It assigns more importance to bigger stocks. The top five stocks (1%) are worth more than $9.3 trillion (23%) out of the SPDR S&P 500 ETF Trust’s (SPY) total market cap of about $40 trillion.

The cap weighted method doesn’t work so well in terms of assigning importance to wealthy persons. If we asked the founders of these companies—Jeff Bezos, Bill Gates, Jeff Zuckerberg, Sergei Brin, and the late Steve Jobs—their opinions on political issues, would we give their answers 23% of the weight of all votes in America? We don’t weight political votes by wealth, so why weight stocks by wealth. That’s why, on a data level, I look at a larger number of smaller companies—the Russell 2000 Index (IWM).

The comparison of the S&P 500 and the Russell index clearly tells us money has been moving into the biggest stocks, and not necessarily into the rest of the market. So why then am I bullish?

Well, recently we had an ETF dump. When selling in ETFs hits a high level, market troughs are often put in near-term. I put prior instances in orange boxes. Notice the two most recent times (thin orange lines):

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

To me, this indicates near-term lows are in.

Bodner went on to discuss how we experienced significant selling in industrials and large-cap stocks as fears spread that China’s economic growth was slamming on the brakes. Uncertainty over China’s real estate behemoth, Evergrande, and the threat of its default also led to more selling than buying at the end of September.

But all the selling on Monday, September 21 (43%) accounted for the bulk of the selling that entire week, so it was potentially a “one and done” instance.

And what was being bought in the wake of this sell-off had all of us at Navellier & Associates very excited: high-quality growth stocks—those that had both superior sales growth and were profitable—were being bought hand over fist. In other words, there is a strong demand for quality.

In Bodner’s words, “I’m very familiar with many of these stocks and have not seen buy signals on these names for many months. Suddenly, they are getting scooped up. Such a bid for quality is bullish. Bull runs are often sparked to life when leaders lead higher. I am excited to see buying in stocks like these.”

The conclusion we can draw?

A flight to quality is underway—and growth stocks should lead the market higher in the fourth quarter and beyond.

The Next Roaring ‘20s

Now, I know what you’re thinking. Earnings momentum slowed down drastically in the third quarter—why will growth stocks lead the market going forward?

First, you’re not wrong. The S&P 500’s earnings momentum has tapped the brakes. For the first quarter, the S&P 500 averaged 52% average earnings growth, and for the second quarter, the S&P 500 posted 91% average earnings growth. Both represented record earnings growth for S&P 500 companies.

But the third-quarter’s average 30% earnings growth is nothing to sneeze at. In fact, it still represents the third-best earnings growth since the third quarter of 2010.

The Negative Nellies, of course, would disagree. They would have you believe that earnings momentum has stalled, that growth stocks are dead in the water, and that the stock market is heading for a tumble.

But here’s what they’re missing (ignoring!): The S&P 500 is expected to achieve more than 20% average earnings growth in the fourth quarter, and that’s up from estimates for 18.1% just three months ago.

In addition, calendar year 2021 earnings growth is anticipated to average more than 40%. And while fiscal year 2022 earnings momentum is forecast to tap the brakes a bit, the S&P 500 is still expected to report 9.5% average earnings growth. [2]

earnings growth numbers like that, I think it’s unwise to bet against growth stocks.

But don’t just take my word for it. In his October 12 article, Bodner revealed why we may be heading into what could be considered the next Roaring ‘20s…

In my best Biden voice, let me say: “Here’s the deal!” I think we are heading into the next Roaring ’20s. The last major pandemic was the 1917–1919 Spanish flu. Then came a sharp, short recession and market crash. We emerged into a boom in the economy and rising personal wealth.

Currently, we are emerging from lockdown, economic hampering, supply-chain disruptions, and pent-up demand. I believe we’re on the cusp of a similar boom. In the 1920s, the Dow Jones Industrial Average was the equivalent of the NASDAQ today. It was filled with new industrial companies.

Today, we think of the Dow industrials as boring stocks. But back then, they were the growth engines.

Think of all those companies suddenly producing cars, radios, and airplanes – great new stuff! These new toys and tools were the technology growth companies of the time.

Today, we have the Nasdaq Composite Index. It’s loaded with tech-heavy companies and has been the growth engine for stocks for years now. For example, almost anything you touch, look at, ride, or use today is packed with tech, like semiconductors, software, and other electronic components.

Many wonder how it can continue… but I wonder how it can’t.

Just look at the chart below, showing the Dow Jones from January 1921 until December 1925 next to the Nasdaq from October 2015 until now.Each period was 60 months… and each period rallied about 115%.

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

Pretty amazing right? What’s shocking is that the Dow Jones went on to rally another 150% in the following four years. Will history repeat itself?

I believe so. I don’t think stocks will crash – they will dash. And growth will lead the way.

The reality is that the rising tide will no longer lift all boats. With the S&P 500’s earnings momentum slowing down in the fourth quarter and continuing to dip heading into fiscal year 2022, institutional and individual investors alike are growing more and more selective. In other words, they’re focusing on fundamentally superior stocks—stocks that are able to maintain accelerating earnings and sales momentum in a slowing earnings environment.

It’s an environment where growth stocks prosper immensely—and it’s an environment where the Navellier custom portfolio solutions thrive.

Prepare Now to Be Another 30% Higher by Memorial Day 2022

My fascination with growth stocks started back in the late 1970s during my college years at Cal State Hayward. I wanted to uncover how to beat the market without taking on too much risk—and what I discovered was that a select group of stocks can consistently outperform the S&P 500: stocks with superior fundamentals. Today, I’m a self-proclaimed “number guys” because the numbers do not lie—and right now, the numbers are telling me that fundamentally superior stocks could appreciate as much as 30% by Memorial Day 2022. Let me break it down for you…

Here at Navellier & Associates, we believe in the power of a well-balanced portfolio. It can literally neutralize the stock market’s uncertainty, protect your retirement, and take advantage of unique growth opportunities the market throws our way. That’s why we encourage our clients to take a diversified approach to managing their investments—one that can include growth, income, and capital preservation strategies. Some of our most-popular custom portfolios are our growth portfolios. So, let’s start there because they are a good example of why the stock market could steadily rise in the upcoming months.

Growth Portfolios

These portfolios feature companies that are committed to growing their sales and earnings. Our growth portfolios are segmented by market capitalization, are actively managed, and seek inefficiently priced growth stocks with opportunities for long-term price appreciation.

Take our Large Cap Growth portfolio for example. This portfolio is characterized by about 57% average earnings growth and nearly 47% average sales growth. It’s important to note that our portfolios do not go up as much as forecasted sales and earnings due to P/E compression. However, these stocks typically appreciate up to 60% of their underlying earnings growth.

Considering that, when you take 0.60 times 57% average earnings growth, it equates to 34% appreciation. Are you starting to see why the stock market could rise another 30% by Memorial Day?

Income Portfolios

These offerings provide dividend growth and income opportunities with capital appreciation. At Navellier, our dividend and income portfolios strive for portfolio growth through securities with capital appreciation, strong dividend growth, and income opportunities. Take our Power Dividend portfolio for example. This portfolio is characterized by about 19% average sales growth and 59% average earnings growth. Using the same formula as the one utilized above to the Large Cap Growth portfolio… 0.60 times 59% average earnings growth, it equates to 35% appreciation.

Capital Preservation/Defensive Portfolios

These portfolios aim to outperform up markets and limit losses in declining markets by moving to cash or bonds. This asset allocation plan allows investors to play defense in a declining market.

Our Defensive Alpha portfolio, as an example, aims to provide clients with an asset allocation that combines stocks and cash. Its ultimate goal is help protect a portfolio’s value during prolonged market downturns.

When you add up everything we have discussed today, you can quickly see the importance of having a diversified approach to managing your investments—one that can include growth, income, and capital preservation strategies. The power of a well-balanced portfolio cannot be overstated.

When you dive deeper into the details of our exclusive portfolios and strategies, you will see that many of them cross boundaries and can be combined to form an overall portfolio strategy. That portfolio can then be customized to your personal financial goals and risk tolerance.

To build a personal portfolio that strives to deliver returns, it is important to think about things such as your retirement goals, how long you have to reach those goals, and what your risk tolerance is… just to name a few.

At Navellier & Associates, our team is here for you. We will work with you to answer these questions and discuss a customized solution tailored specifically towards you and your retirement goals.

Right now, we have a very bullish outlook for the remainder of 2021 and well into 2022. As we just discussed, growth stocks have returned to favor, and the stock market could appreciate another 30% by Memorial Day 2022. We can help you build a personal portfolio that will prosper in this environment.

In fact, here’s a sneak peek at how we select stocks for each of our custom portfolio offerings…

Our Proprietary 3-Step Stock Selection Process

At Navellier & Associates, our system was built to find inefficiency in the market, uncover what we think are the market’s best growth stocks, and utilize a disciplined quantitative and fundamental analysis system to create a customized portfolio for individual investors.

Consider an example of the three-step proprietary stock-selection process that we utilize for most portfolios:

  1. Quantitative Analysis: Using our proprietary screening process, we measure reward (alpha) and risk (standard deviation) indicators to the appropriate market capitalization range for each portfolio. We rank stocks based on the reward/risk measure and reduce the initial investment universe to a select bucket of stocks that fall into the upper percentiles of the reward/risk measure.
  2. Fundamental Analysis: We then apply fundamental variable screens to the stocks with the highest reward/risk measures. This shines the spotlight on which companies have exceptional profit margins, excellent earnings growth (and positive earnings surprise potential!), and reasonable price/earnings ratios (based on expected future earnings).
  3. Securities Optimization: We use a proprietary optimization model to maximize alpha, while minimizing portfolio standard deviation. This can efficiently allocate the stocks and create portfolios that are well diversified across sectors and industries.

Primarily, our goal with the three-step stock selection process is to develop portfolios that have a low correlation to their benchmarks, increasing diversification, decreasing risk, and maximizing profits for investors like you.

The year of 2021 is quickly winding down. The stock market is narrowing, investors are growing more selective, and growth stocks are returning to favor. So, we believe that now could be a good time for you to have a custom investment strategy that focuses on your financial goals and risk tolerance, as well as diversification.

Navellier & Associates can help you build your own customized portfolio strategy. We rely on our extensive research, trend analysis, customized strategies, and historic market knowledge to manage our client-only portfolios and help our clients take advantage of opportunities that are presented by market corrections—short and long-term—as well as raging bull market situations.

Our proprietary models are built to work on U.S.-based portfolios with a minimum account value of $250,000. If your portfolio meets these criteria, please contact my Navellier & Associates team. They are standing by ready to discuss your personal portfolio and investment strategy to help you make the most of the final weeks of 2021, as well as prepare for 2022.

Schedule Your Portfolio Review Today

Need some help determining if your portfolio is well-balanced? We can help!

The first step is contacting us to set up a no-obligation portfolio review. This is our opportunity to get to know you a bit more. And don’t worry, there is never a charge for this portfolio review.

If you decide you would like Navellier & Associates to manage your portfolio—or one aspect of your portfolio—we will discuss any management fees for that service.

If you decide you’d like to continue to manage things yourself, we hope that we gave you some important information to consider during your portfolio review.

We are not here to simply preach to you, but rather share information that we have gained from our extensive market research and analysis. We also want to know about you so that we can make the right suggestions for your personal situation. CLICK here now to schedule your no-obligation portfolio review.

I’m confident that Navellier & Associates can help guide you to build a portfolio to navigate the current environment and help you achieve your individual financial goals in 2022.

All the best to you and yours,

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

Claim Your No-Obligation Personal Portfolio Review

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About Louis Navellier

My name is Louis Navellier and I’m most widely known as an investment adviser and market analyst. Since 1980, I’ve been publishing my quantitative analysis on growth stocks and I’ve made it my life’s work to continuously refine and develop my analysis for investors like you.

My research and analysis have led to regular appearances on CNBC and Fox Business News and I am frequently quoted by MarketWatch and Bloomberg.

I also manage money for private and institutional clients through my money management company, Navellier & Associates, Inc.

Wealthy individuals and institutional investors want access to my 30+ years of quantitative research experience.

Our work with these professionals requires tight controls on investment risk and an exhaustive due diligence process.

The overall goal for our clients focuses on how we will achieve steady, long-term returns in up and down markets.

At Navellier & Associates, our proprietary quantitative models are designed to balance stocks, mutual funds, and income producing investments to maximize returns while controlling risk.

And today, I’m thrilled to give you the opportunity to put this same rigorous screening criteria and quantitative and fundamental analysis to work for your portfolio. For U.S.-based portfolios from $250,000 to $100+ million — my firm is here to help.

1 https://www.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_101521.pdf

2 https://www.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_101521.pdf

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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.