FORWARD: NATIONAL BULLION INVESTORS, LLC DOES NOT CONDUCT TRANSACTIONS IN FUTURES CONTRACTS, OPTIONS ON FUTURES CONTRACTS, OR SECURITIES. THEREFORE, THIS RISK DISCLOSURE RELATES ONLY TO THE OWNERSHIP, PURCHASE & SALE OF PHYSICAL PRECIOUS METALS BULLION PRODUCTS.

This brief statement of risk cannot disclose all the risks involved and other significant aspects in the purchase or sale of Physical Precious Metals Bullion Products. The purchase of them involves a high degree of risk that is not suitable for all investors. You should enter into agreement to purchase said products only if you are fully aware of the potential for loss and understand the nature and extent of your rights and obligations. As in any area of ownership, the chances for success in the purchase and sale of said products are influenced not only by the risks involved in such activities, but how well those risks are understood. Individuals considering buying or selling said products are urged to obtain additional information and to ask specific questions (and obtain specific answers) concerning the risks as well as the opportunities.

I. Introduction
The object of this guide is to briefly explain in most straightforward terms some of the many risks involved in the purchase and ownership of Physical Precious Metals Bullion Products. From brief discussions around the concept of systematic (or financial, non-diversifiable) risk to identifying some of the specific risks involved with precious metals purchase and ownership; if you invest, you are certain to confront these risk-related issues. For it is precisely and only the assumption of risk of loss that gives the rise to the opportunity for profit in the first place. Risk is fundamental to profit. The terms risk and profit are inseparable; opposite sides of the same coin. So the profit potential of any given financial opportunity can only be assessed in the context of its attendant risks. Please remember, all discussions of this guide are necessarily incomplete and should serve only as an introduction to the concepts and aspects of financial risk.

II. About Risk
An exhaustive study of the concept of risk will trace back to philosophical roots of David Hume, where in 1748, in his famous "Enquiry Concerning Human Understanding," he wrote: "Though there be no such thing as Chance in the world; our ignorance of the real cause of any event has the same influence on the understanding, and begets a like specie of belief or opinion." The concept of risk would span subjects from mathematics to philosophy, psychology to economic behavior, and would include quantitative as well as qualitative analyses. Ultimately, the interpretation of risk became highly subjective and personalized.

Most of the famous ideas about risk emerged with the 20th century. The world's most famous economists of that early period, Frank Knight (1921), John M. Keynes (1921), Richard von Mises (1928) and Andrey Kolmogorov (1933), had long debated on the subject of risk. However, what had marked the beginning of modern finance would date back to an article written in 1952 by the famous economist, Dr. Harry M. Markowitz, in the Journal of Finance. As defense for his doctoral thesis, Markowitz drew attention to the common practice of portfolio diversification, a theory that later had widely became known as "Modern Portfolio Theory." In 1990, Dr. Markowitz won the Nobel Prize for his contributions to financial economics. Although economists had long understood the common sense of portfolio diversification, what Dr. Markowitz had successfully demonstrated was how to measure the risk of various securities, and how to combine them in a portfolio to achieve maximum return for a given risk.

Portfolio theory is generally perceived as a body of models that describe how investors may balance risk and reward in constructing investment portfolios. The capital asset pricing model is an enormous step toward understanding the effect of risk on the value of an asset (W. Sharpe, John Lintner, and Jack Treynor, mid-1960s). However, where someone falls on the Risk Aversion Curve (Milton Friedman, 1948), in other words, their "risk tolerance," will depend on many diverse and unique considerations. While in an efficient market, risk and reward are always theoretically commensurate, the implications and effects of the potential or actualized gain or loss on any given individual can be very different from one another. If two people have different tastes, it may make sense for them to hold different portfolios. The quantitative side of the CAPM model isn't rich enough to deal with such a world and assumes primarily that all investors have similar tastes. Hence, the question must be answered qualitatively: Will an investor's quality of life be improved more by the expected gain than will it be detrimental by the potential loss? The very essence of the economic concept of the Diminishing Marginal Utility of Wealth (Arrow, 1971). Indeed, diminishing marginal utility of wealth probably explains much of our aversion to large-scale financial risk: We dislike vast uncertainty in lifetime wealth because the marginal value of a dollar when we are poor is higher than when we are rich. Within the expected-utility framework, the concavity of the utility-of-wealth function is not only sufficient to explain risk aversion-it is also necessary: Diminishing marginal utility of wealth is the sole explanation for risk aversion (M. Rabin, University of California, Berkley).

Thus, risk has two aspects: 1) The probability that a loss will occur, and 2) the amount of money that is at risk if the loss does occur; in other words, the probability and magnitude of the potential loss. To illustrate, on the extreme ends of the risk spectrum are a lottery ticket and a Treasury bond. The lottery ticket has an extremely high probability of a loss occurring, but a very small amount of money at risk. On the other hand, the Treasury bond has a very small chance of loss, but, if a loss does occur, a much greater amount of money would be lost. Between these two extremes on the spectrum of risk lie virtually all financial investments, speculations and gambles.

The risk evaluation process must weigh and consider both aspects of risk to be effective. Precious metals markets (as other markets) are anticipatory price discovery mechanisms. The price market constantly changes placing premiums and discounts to reflect future expectations of market participants. Some academics theorize that at any given time the current market price of any liquid asset reflects all known information about that asset, and any future price movement is an absolute uncertainty, completely random in nature (Efficient Market Hypothesis and the Random Walk Theory, M. Kendall, 1953). The mental picture of all market participants divided into two equal groups captures this concept. Half think the market will go up, the other half think it will go down. When one market participant changes his or her mind and moves to the other side, the market price will change until all market participants are again divided into two equal groups.

Theoretically and practically, no one knows which way the market will move. Not your broker, not the principals of the firm, not the exchanges, not market-makers, not even the government, Federal Reserve Board Chairman or the President of the United States himself. We emphasize this point because it should always be kept in the forefront of one's mind while viewing the precious metals market or any other market. (In fact, if anyone did ever truly know in advance where the market was going, the very integrity of the market itself would be breached.) Furthermore, it is philosophically true and statistically proven that the past price movement of any given market is not, and cannot be, predictive or even indicative of future price movement.

The precious metals markets, and other liquid markets, reflect the uncertainty that looms over all human affairs. Indeed, the origin of the "market" itself is derived from people's innate desire to identify, speculate in, or avoid such uncertainties. One of the major functions of modern markets is to transfer risk. Those who are willing to accept the transfer of these risks do so in hopes of generating a profit, because they are speculating on whether the price will rise or fall from its current level. In purchasing Precious Metals Products, informed decisions - including whether or not to participate at all - should be based on a thorough understanding and careful weighing of the risks attendant to such ownership. Moreover, it should always be kept in mind that what may be attractive and appropriate for one individual may involve risks that are totally unacceptable for another individual. Purchases of these products are not suitable for everyone.

III. Few Words on Specific Risks
In considering whether to invest in the high risk over-the counter precious metals where there exists a substantial degree of price volatility and financial leverage, you should understand and seriously consider the following risk factors which you are certain to encounter:

RISK OF TOTAL OR NEAR TOTAL LOSS
Precious metals involve an extremely high degree of risk of loss and are not suitable for all investors. Investors can and may lose all or part of the money they deposit. Due to of the volatile nature of precious metals, the market price and, consequently, the value of your account can rise and fall sharply without notice. The use of leverage can substantially increase your risk of loss. Deposit only risk capital, in other words, money you can afford to lose, only. Also, there is no guarantee that the product you purchase today will retain in the future all or any part of its current value. For example, the supply may become so over-abundant that no one will pay for it. Man-made substitutes may render the product worthless. Finally, there may in the future exist no organized market in which you may sell the products you purchase today. Please be advised that the risk of total or near-total loss of the investment is solely yours. Only those individuals capable of sustaining such loss should consider purchasing.

THE USE OF LEVERAGE
You may also be subject to losses that exceed the amount deposited in your account when purchasing precious metals with leverage. The use of leverage generally causes the value of your position to change at a greater rate than that of the underlying asset, substantially increasing the risk of loss.

ETS, RISK OF TRADING HALTS, SUSPENSIONS, AND ORGANIZED MARKET DISAPPEARENCE Purchasing precious metals on an electronic purchase system (ETS) may differ significantly from non -electronic environments. If you undertake transactions on an electronic system, you will be exposed to risks associated with the system, including the failure of hardware and software. The result of any system failure may be that your order is either not executed according to your instruction or is not executed at all.

You should also note that on any given day, trading in categories of Precious Metals Products may be restricted, suspended or halted entirely for any number of reasons. When trading is so restricted, suspended or halted, it may be difficult or impossible to know when the market will resume trading activity.

PRICE FLUCTUATION
These products are subject to sudden price change and volatile price fluctuation. The value of the product you purchased may dramatically decline in the course of a trading day. As the result of an adverse price movement, or other factors, you may sustain a total loss of your initial deposit (including commissions paid) and any additional funds that you deposit. Only those individual capable of sustaining such price fluctuations and risks should consider purchasing. No investment system has ever been devised that can consistently produce profits or predict the market. It is only the assumption of risk of loss that gives rise to the opportunity to profit. Some academics theorize that at any given time the current market price of any commodity or stock (or other liquid asset) reflects all known information about that market, and any future price movement is an absolute uncertainty, completely random in nature (see Efficient Market Hypothesis and Random Walk Theory). Past price performance is not necessarily indicative of future results. The recommendations of brokers, traders, advisors, and analysts represent only their opinions and are normally insignificant in the face of the overall market.

PURCHASE PRICE
Commissions, bid/ask spreads and other transaction costs can have a substantial adverse effect on your market positions' ability to break even, and, therefore, your ultimate profitability or loss. In order for you to achieve a net profit on any transaction, the price received upon the sale of the market position must exceed the purchase price by at least the amount of any commissions paid and other transaction costs. Investing in precious metals may involve frequent purchase and sale transactions, resulting in significant commissions and costs. Commission charges and other such cost increase the risk of loss and can account for all or part of losses. Generally, to calculate your breakeven price, total all commissions and fees, divide by the unit quantity involved in the transaction, and then add the result to the buy price or subtract it from the sell price.

ORDERS
Placing certain types of orders, such as stop -loss or stop limit orders, which may be intended to limit the amount of loss, may not be effective because price movement or market conditions can make it impossible to execute such orders. Strategies utilizing spreads and/or straddles may have as much risk as simple long or short positions. It may be difficult or impossible to execute orders and offset or liquidate open market positions due to market liquidity and/or operations.

SOLVENCY
There is always a risk associated with the solvency of the exchange, the clearing firm and the counter-party to your transactions. There is no governmental or private institution or party that can truly "guarantee" performance on open positions in any market, nor is the brokerage or clearing firm insured against default or insolvency.

POSSIBLE CONFLICT OF INTERESTS
Significant conflicts of interest exist between you and the broker/dealer, the clearing firm, and/or the market maker/ counterparty. A conflict exists because the broker/ dealer, clearing firm and/or market maker/counterparty stand to gain from increased activity in your account, which generates increased brokerage commissions and/or clearing fees. Both the broker/dealers and clearing firms are free to engage in any precious metals transaction, capacity or activity that either deems appropriate, despite whether it may present an apparent, potential or actual conflict of interest with your account.

JURISDICTION
Any transactions that are made in international over-the-counter markets outside of the jurisdiction of your country are not subject to its government regulation. Foreign markets may have regulations that differ significantly from those in the country where you reside, and may afford substantially less customer protection. While some off-exchange markets are highly liquid, such transactions may involve greater risk than in your country because there may be no marketplace on which to close out open positions.

You should have sufficient knowledge and experience in financial and investment matters as to be capable of under standing and evaluating the risks and merits of investing in precious metals. If you lack such knowledge and experience, or do not understand the precious metals markets, you should seek the advice of a qualified attorney or trained financial advisor before depositing any money for precious metals.

This brief statement cannot identify all of the risks and other significant aspects of ownership of precious metals. You should, therefore, carefully study and understand the Disclosure Statement and all aspects of the account, the product, and the ownership vehicle, prior to depositing any money for the purchase of precious metals. If you do not understand any part of the Risk Disclosure Statement, seek the advice of a qualified attorney or trained financial advisor.

IV. Some Further Suggested Reading on Risk

• Risk, Uncertainty and Profit Frank H. Knight, McMillan Publishing Co.
• The Remarkable History of Risk Peter L. Bernstein, John Wiley & Sons, Inc.
• Capital Ideas: The Improbable Origins of Modern Wall Street Peter L. Bernstein, New York: Free Press.
• Portfolio Selection & Efficient Diversification Harry Markowitz, Baldwin Publishing
• Enquiry Concerning Human Understanding Hume, David. 1748
• The Complete Guide to Precious Metals Jack Schwager, Harper Business
• Gold as a Strategic Investment Lawrence McMillan, New York Institute of Finance
• Volatility, Pricing & Risk Strategies Sheldon Natenburg, Probus Publishing Co.
• Market Wizards Jack Schwager, Harper Business
• A Treatise on Probability JKeynes, John Maynard, London: Macmillan.