2ND 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, used as a benchmark for everything from mortgages to student loans, fell 1.218 points to .691% in the first quarter. (Yields move inversely to prices.) The yield declined somewhat further to .678% in the second quarter.  While long term government bonds were basically flat in the quarter, the average bond fund grew 6.5%.  The drivers were high yield corporate debt and emerging market debt.

Other Assets:  Our aversion to long-term bonds remains. We like maturities under two years and cash and alternative investments such as municipal tax liens. We are also looking at precious metals, especially gold, at this time.