4TH QUARTER FIXED INCOME

Fixed Income Market: Prices of Government bonds rose as investors sought some place to stash their assets. The yield on the 10-year Treasury note had remained below 1% for most of 2020. (Yields move inversely to prices.) Government bond funds showed over 8% growth for the year. In recent weeks, however, the yield was above 1.1% based upon some concern over future inflation.

Other Assets: Our aversion to long-term bonds remains. The likelihood of future inflation is not good for long-term bond prices. The problem of the growing Federal deficit is also an issue for bond prices. We like maturities under two years and cash and alternative investments such as municipal tax liens