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Mid-1st quarter update
By Gary Case

The investment year has started out with a bang! Most asset classes are up, much as in the past two years. The election year and continuing Greece saga taint the outlook, while economic news on the home front is positive. The Federal Reserve is broadcasting low rates for the coming two years, home sales and prices seem to be firming.

Spreads between the interest rates in treasuries and high yield securities are still rather wide (meaning interest rates on high yield bonds is significantly higher than on Treasuries). Bonds have been very positive performers for several years and there is reason to begin to evaluate how to best position portfolios going forward.

Specifically, I have been evaluating how to obtain the highest yield per unit of bond investments in your portfolio and have reached the conclusion that it is time to reduce exposure to treasury securities. I still like Treasuries, but feel that for at least a time looking forward corporate and foreign (NOT European) bond bring greater value to portfolios.


I have restructured the bond portfolios that I manage to reflect this philosophy and have noticed that strategist I employ on your behalf are doing the same.

While I am pleased with the direction of the economy and markets, I hesitate to declare that we are out of the woods. Thus I remain mostly defensive with tactical positions in various individual stocks and market sectors, retaining the ability to exit those positions should things get dicey.

I hope this brings you up-to-date on my thinking and may explain some of the paperwork you have received lately. As Always, please feel free to contact me with your questions and concerns. I remind you that I accept new clients by referral from my existing clients.


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