The purpose of this report is to present you with an opinion which is as clear as possible about the present situation on the financial markets. The information presented in this report is provided to you for information purposes only and is not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. Information and opinions presented in this report have been obtained or derived from sources believed by RFP to be reliable, but RFP makes no representation as to their accuracy or completeness. RFP accepts no liability for loss arising from the use of the material presented in this report.

Summary:

For more than three years now, and well before the beginning of the subprime crisis, we have recommended to our clients to stay out of the stock markets. Just like what we thought, the “rebound” of the economy between 2009 and 2010 was not a real sustainable “recovery”. Global growth is on the brink of a second slowdown. At the same time, the Western world, and more especially Europe, is in the middle of a solvency crisis, catalyzed by several peripheral countries like Greece, Portugal or Ireland, which can potentially lead to a banking crisis. The United States have also lost their AAA grade for the first time in history. These events have created a climate of panic on the financial markets, which have once again become irrational. As long as the volatility remains this high, we still think that investing on stocks remains difficult. However, as many European stocks are sold irrationally, some buying opportunities can already be found and we think that this could be a good moment to start to buy very moderately.