2nd QUARTER FIXED INCOME

Fixed Income Market: The sentiment in the bond market was different. Bond prices rose over concerns about the global economy. When investors get nervous, they buy government bonds. The yield on the 10-year Treasury was 2.0% at the end of June versus 2.42% at the end of March. (Yields move inversely to prices.)  We also now have the situation of an inverted yield curve in which long-term bond yields are lower than short-term bond yields. Historically, this inversion has usually been a warning sign of coming recession.

Our repeated aversion to bonds with long maturities remains firm.  We prefer to find higher yielding alternative investments such as municipal tax liens.