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PORTFRMULA$

FORMuLAIc mENDING MONEY MANAGEn

The Formulaic Trending Mon thly Abstract


October 15, 2012: RAM Score
=

+26.65

Mapper Score TM

4 of 6 increasing (plus 1 remaining even)

RAM Score is a proprietary trending tool that takes into account several dynamic components related to the U.S. markets and economy. It features a core baseline which allows for correlation between these multiple components so that they may be added together for an overall Ram Score. As a trending tool, we believe that a positive RAM Score indicates that the odds are stacked in favor of equity investments and a negative RAM Score indicates that odds are stacked Mapper Score is a proprietary trending tool that takes into account several dynamic components related to the underlying against equity investments. TM stocks represented within an index. It identifies certain strengths of individual stocks contained within an index and tracks how many meet minimum Our scoring requirements. As a trending tool, we believe that the higher the percentage of qualifying stocks, the greater the strength of the overall index. mechanisms do not guarantee that the markets will increase when scores are strong or decrease when the scores are weak. But we believe the long term TM correlation may be valuable for investing... Combining our trending features of RAM Score & Mapper Score with our Portformulas intricate Formulaic TM Investing Strategies results in a uniquely logical approach to investing that is exclusively available through Portformulas.

TM The overall RAM Score has increased from +2184 to +26.65this month... the Mapper Score collection has also increased from 1 of 6 increasing to 4 of 6 increasing, plus 1 remaining even, so that 5 of 6 were even or positive. All major U.S. indexes posted gains for the month. Given that the stock market has continued to plod upward, a recent article caught my attention on the front page of Investment News for the last week of September. The headline read, To Chicken for Stock, with a subtitle of S&P 500 near all-time high, but investors arent biting. My take from the overall article was that the reporter was a bit overzealous in their prognosis that investors, as I quote, appear almost oblivious to the fact that the stock market is on a tear. I find it depressingly comedic when rear-view-mirror investors (or in this case reporters and/or financial advisors) talk as if everyone should have been so smart as to jump into the market at its absolute low, just following the crisis. Then they make it seem perfectly sophomoric that one would simply ride the wave upwards... Ironically, they never openly share the fact that they, and/or most, rode the crisis into the abyss and were financially crushed in the process. As the old saying goes, its not how much you make, but how much you keep. This is why we adhere to formulaic trending. We believe there are times when the market has odds stacked in your favor and times when it has odds stacked against you. Thus, the theory for RAM Score and our most recent tool, the Mapper Score, which is imbedded inside our Freedom Series investment models. Just imagine if one could have sidestepped the crisis and then reentered equities once a trend had reestablished (not at the absolute bottom, of course). Take a close look at the RAM Score graphics on the following page to get a better feel for such strategies. Anyway, a side note to the article also stated that a survey of 1,000 investors found that 66% thought the market was down in 2009, 48% in 2010 and 53% felt it was down in 2011. Obviously, the gotcha was that the market was up during those three years. But with all the economic turmoil, European upheaval, unemployment, and business-attacking politics, its no wonder folks feel like things have been down. (As a matter of fact, had you adhered to a straight-up buy-and-hold philosophy on the S&P 500 from 2007 through today, you would still be down. Thats just simple math... and simple reality. This is exactly why we do what we do for Portformulas investors. We believe the answer f) (4% is not buy-and-hold and not market-timing, but formulaic trending.
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By the way, as a parting thought, the only way to fix the unemployment issue (and debate) is to regain governmental confidence within business. A recent Moodys Analytics graphic titled What Businesses Are Most Worried About sums up everything quite nicely. The #1 concern is weak sales (which is most always #1), then followed by a tie for #2 and #3 with Pricing Power and Regulatory/Legal (both of which th 4 and beyond. Once business regains are heavily influenced by government intervention and politics). All other worries are a very distant confidence, and hopefully the election will help accomplish this, they may begin hiring/rehiring again. Pretty simple stuff.
.....

In summary, RAM Score again, reflects 7 of 7 subcomponents as positive while Mapper Scores post 5 of 6 at even or increasing. Please check out the following graphic pages for details & comments. For more information you can visit www.portformulas.net or speak with your Financial Advisor (for now, the new Freedom Series page is still temporarily included for your convenience). Best of Investing, Mike Walters, CEO

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FoRMuLic TRFNnN MONTY MANAGER

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Portformulas Investing Corporation TM Form ulczic Trending Money Manager SEC Registered Investment Advisor 6020 E Fulton St. I Ada, MI 49301 (888) 869-5994 www.portformulas.net

PORTFRMULAS

FORMuLAIc ThENDING MONEY MANAGER

Below you can see how the time weighted returns (TWR) of the FREEDOM SERIES models compare against their corresponding index since inception earlier this year:
Freedom D30 2.54% -0.11% -5.57% 6.79% -0.28% -0.48% 3.87% 6.47% 2.72% Freedom NSDQ 3.03% 1.28% -2.45% 3.07% 1.56% 2.53% 1.28% 10.65% 5.61% Freedom R2000 0.54% 1.60% -3.82% 1.76% -1.05% 2.99% 1.89% 3.81% 0.55% DJIA (Dow 30) 2.01% 0.01% -6.21% 3.99% 0.94% 0.63% 2.65% 3.75% Freedom SP400 0.26% 0.79% -4.26% 0.80% -0.53% 3.16% 0.70% 0.77% -0.42% Freedom 5P500 3.26% 1.52% -3.82% 3.16% 0.67% 0.34% 2.34% 7.52% 2.04% Freedom R3000 1.98% 1.23% -3.17% 4.90% -1.33% 2.86% 1.77% 8.31% 3.50% S&P 400 1.73% -0.30% -6.63% 1.73% -0.12% 3.30% 1.80% 1.19%

March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 Since Inception Model Difference

March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 Since Inception Model Difference

March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 Since Inception Model Difference

NASDAQ 4.20% -1.46% -7.19% 3.81% 0.15% 4.34% 1.61% 5.04%

March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 Since Inception Model Difference

S&P 500 3.13% -0.75% -6.27% 3.96% 1.26% 1.98% 2.42% 5.49%

March2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 Since Inception Model Difference

Russell 2000 2.39% -1.62% -6.74% 4.81% -1.45% 3.20% 3.12% 3.26%

March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 Since Inception Model Difference

Russell 3000 2.93% -0.77% -6.41% 3.75% 0.87% 2.25% 2.46% 4.81%

**The above returns are time-weighted returns; time-weighted returns show the compound growth rate in a portfolio while eliminating the varying effect created by cash inflows and outflows by assuming a single investment at the beginning of the period and measuring market value growth or loss at the end of that period. Time-weighted returns also reflect performance after advisory fees have been deducted. The Freedom series invests in equities and based on the qualification criteria, may hold equity positions regardless of overail market movement. Pastperformance is no guarantee offuture results. Investing in equities carries an inherent risk and it is possible that you could experience significant losses in the event ofa market decline. Please consideryour risk tolerance carefuily before investing.

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Portformulas Investing Corporation Form ulaic Trending Money Manager TM SEC Registered Investment Advisor 6020 E Fulton St. I Ada, MI 49301 (888) 869-5994 wivw.portformu1asnet

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FORMuLAtC TRENDING MONEY MANAGER

RAM Score is a proprietary trending tool that takes into account several dynamic components related to the U.S. markets and economy. It features a core baseline which allows for correlation between these multiple components so that they may be added together for an overall 5 are tacked in favor of equity investments and a Ram Score. Asatrending tool,we believethata posftive RAMScoreinchcates that the negative RAM Score indicates that odds are stacked against equity investments. 1 ,.j p
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RAM Score (13 mo)

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Portformulas Investing Corporation Form ulaic Trending Money Manager TM SEC Registered Investment Advisor 6020 E Fulton St. I Ada, MI 49301 (888) 869-5994 www.portformulas.net

PORTFRMULAS.

FORMuLAIc TRENDING MONEY MANAGER

Mapper Score is a proprietary trending tool that takes into account several dynamic components related to the underlying stocks TM represented within an index. It identifies certain strengths of individual stocks contained within an index and tracks how many meet minimum requirements. As a trending tool, we believe that the higher the percentage of qualifying stocks, the greater the strength of the overall index.

(NOTE: As such, we do not believe that all stocks within an index are automatically worthy of ownership. In the FREEDOM SERIE5 we seek to only own the stocks that meet our qualification criteria. The Mapper Score illustrates how many stocks we view worthy of consideration.) TM

Mapper Score for Dow 30 tM Stocks Mapped = 12 Mapper Score = 40.00%

Mapper Score for S&P 500 TM Stocks Mapped = 71 Mapper Score = 14.20%

TM Mapper Score for Russell 3000 Stocks Mapped = 162 Mapper Score = 5.40%

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Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Mapper Score for NASDAQ TM Stocks Mapped = 63 Mapper Score = 2.33%

Mapper Score for S&P 400 TM Stocks Mapped = 41 Mapper Score 10.25%

Mapper Score for Russell 2000 TM Stocks Mapped 42 Mapper Score = 2.10%

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Our scoring mechanisms do not guarantee that the markets will increase when scores are strong or decrease when the scores are weak. But we believe the long term correlation may be valuable for investing... Combining our trending features of RAM Score & Mapper Score TM with our Portformulas intricate Formulaic Investing Strategies results in a uniquely logical approach to investing that is exclusively available TM through Portformulas.

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PORTFRMULAS

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SEC Registered Investment Advisor 6020 E Fulton St. I Ada, MI 49301 (888) 869-5994 www.portformulas.net

PORTFRMULAS

FORMULAIC TRENDING MONEY MANAGER

Please note that there are a number of important disclosures that must be considered before investing in Portformulas. Please read the information and disclosures contained in Portformulas hypothetical carefully before investing. Any performance figures referenced herein are hypothetical and are not indicative of future results. Purchases and sales of securities within Portformulas various strategies may be made without regard to how long you have been invested which could result in tax implications. RAM Score and Mapper Score General Disclosures The RAM Score and Mapper Score illustrations do not represent any particular Portformula strategy nor are they intended to recommend any Portformula strategy or the RAM Score feature. The information contained herein simply attempts to illustrate how our firms RAM Score feature and Mapper Score operate. The RAM Score feature can be applied to many Portformula models at no additional cost. The Mapper Score is simply an analytical informational tool. RAM Score was not developed until January 2010. Prior to January 2010, clients were utilizing RAM Scores predecessor, RAM. Clients utilizing RAM may have had different results than those reflected above. RAM Score movement prior to 2010 is hypothetical and based on retroactive application of RAM Scores indicators to market and economic conditions existing at the time. Portformulas was not managing assets prior to 2007. It is important to understand that RAM Score is only a tool designed to assist our firms management of your account. RAM Score does not guarantee any specific results or performance and even with RAM Score on your account, it is possible that your account will lose value. RAM Score moves assets into or out of the market based on various economic and market indicators. It is possible that the market will move positively while you are not invested or negatively while you are invested, resulting in losses. Any Portformula strategy may underperform or produce negative results. Just because Portformulas maps a stock does not mean that the stock will be held in a model. Client accounts may hold less stocks than those referenced in the Mapper Score illustration. Mapper Score has no impact on performance. The RAM Score illustration utilizes the S&P 500 index because it is a well-known index and provides a recognizable frame of reference. The Mapper Score analysis uses the referenced indices because they are relevant comparisons across certain Portformula models. The indices referenced herein are not publicly available investment vehicles and cannot be purchased. Furthermore, none of the indices referenced herein have endorsed Portformulas in any way.

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FQRMULAIC TRFNLrc MONEY MANAGER

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Portformulas Investing Corporation Form ulaic Trending Money Manager TM SEC Registered Investment Advisor 6020 E Fulton St. I Ada, MI 49301 (888) 869-5994 wwiv.portformu1as.net