Past performance is no guarantee of future results.  Inherent in any investment is the potential for loss.  Investments in SFS involve risk, including loss of principal. The value of your investments with SFS will fluctuate in response to stock and bond market movements and the operational performances of the companies that issued the securities you hold. 

            Performance results are based upon the asset weighted average returns of all fee-paying accounts managed by SFS.  SFS performance is calculated quarterly using a composite account composed of all fee-paying accounts managed during the stated period.  Accounts are added to the composite as soon as the account is being managed by SFS.   Performance results reflect the deduction of investment advisory fees.  Quarterly performance is calculated using the average balance method, and results are combined geometrically to determine annual, 3-year, 5-year and 10-year performances.  Year-by-year or quarter-by-quarter performances are available on request.  The results shown above include the reinvestment of all dividends and capital gains.  No representation is being made that any account will, or is likely to, achieve profits or losses similar to those shown.  Actual client account performance may differ significantly from averages and could experience losses, even when the average account shows a gain. The extent to which SFS has employed margin has varied throughout performance periods.  This, as well as changes in other factors, has affected composite performance over time.

            Our core strategy takes advantage of particular widening of discounts in individual closed end funds, which we can then purchase and sell when they narrow back to historical discounts.  There is no guarantee that return to historical discounts will always take place.  Furthermore, from time to time, there may be a widening in the average discount of all closed end funds.   At such times, although our individual strategies may be ameliorating losses, the total portfolio we hold may undergo significant loss of value relative to what would be expected from market and sector fluctuations. 

Similarly, several of the closed end funds we trade specialize in a particular sector of the market or invest solely in a particular foreign market or foreign regional market.  The performance of these sectors or individual markets may significantly differ from that of the overall equity markets.

            CEFs have varying degrees of liquidity.  Liquidity is often measured in terms of volume, but for practical purposes, what is important is the spread between bid and ask prices.   Occasionally, we purchase a CEF or a related security which is particularly illiquid as part of an intermediate or long term strategy.  These holdings are not intended to be actively traded.  If because of an emergency clients need to redeem all or most of their portfolio value immediately, spreads may result in significant costs to the clients (in addition to comissions).