2nd QUARTER FIXED INCOME

The bond market was relatively stable in the quarter.   The yield on the 10-year Treasury was 2.84% at the end of June – versus 2.74% at the end of March.    (Yields move inversely to prices.)  Some investors use it as a temporary haven from stocks.

Our repeated aversion to bonds with long maturities remains firm. We still believe the risk of a sharp decline in prices is too great a risk for our clients. We prefer to find alternative investments such as real estate limited partnerships, demand notes, and municipal tax liens. We also note that interest rates of 2% make cash a more attractive asset class than in recent years.