AIS Balanced

Fund, L.P.

Fund Investment Objectives

TAAP Strategy Philosophy: (Balanced Fund is the LP for these accounts) TAAP's discretionary investment process uses the input of its principals, who have years of accumulated experience. As such, AIS exercises discretion in determining the mix of long-term assets in the portfolio at all times. Instead of maintaining a static mix of long-term assets, TAAP invests more heavily in the assets deemed to offer the best growth potential. When AIS does not believe that the risk to reward of being long is favorable, in any of its available long-term asset classes, the portfolio will be invested in cash up to a 100% position. The emphasis on asset allocation is based on considerable academic research, which demonstrates that the selection of an asset class (e.g., bonds, stocks or gold) determines approximately 85% to 93% of an investor's return. Once an asset class has been selected, only approximately 7% to 15% of an investor's return is determined by the individual investments chosen within that asset class. On a long-term basis, asset classes may outperform others for more than a decade once an extreme is reached and an economic reversal has begun. For example, when stocks are in a declining price trend either bonds or gold may be experiencing a rising price trend on which the Fund will attempt to capitalize through its asset allocation process. AIS believes that the disinflation that fueled a rise in financial assets during the 1980's and 1990's has ended and that a return to hard assets, like gold, is now the major theme going forward. AIS believes that hard assets, like gold, will not reach their peak for years. TAAP Process Bond Selection: When AIS' research defines bonds as undervalued and attractive, longer-term U.S. Treasury bonds are purchased. This strategy offers the best opportunity for capital gains from bond price appreciation and because of the high liquidity available in the U.S. Treasury market. Stocks Selection: When AIS' research defines stocks as undervalued and attractive, individual stock issues will be purchased when AIS believes there is an opportunity to outperform the market indices. Stocks are selected for the portfolio based on a proprietary selection process. The goal of the selection process is to identify companies with the potential to outperform the S&P 500 index on a 12 to 18 month time horizon. Portfolio selections are based on an individual stock's price performance over several time periods relative to a universe of approximately 2,000 companies. AIS believes that the absolute and relative historical price of an individual stock represents information which can be analyzed to create a list of securities that then must pass fundamental evaluation before a purchase is made. An individual stock is sold when another, with better prospects, is identified and as long as the TAAP strategy has an allocation to equities on a macro level. It is anticipated that while invested in equities, the portfolio may consist of securities of up to 60 issuers. Companies whose primary industry classification involves tobacco, alcohol or gambling revenues will not be included in the portfolio. Gold Bullion: TAAP buys segregated and numbered bars held in Swiss vaults when process is allocated to gold.