As quoted in Barron’s – March 31, 2003

As quoted in Barron’s – March 31, 2003

We would limit any new fixed-income investments to either select high-yield positions, or inflation-protected bonds (TIPS). TIPS currently have a very low breakeven inflation rate versus Treasuries, meaning that inflation need only to outperform conventional Treasuries. Ten-year TIPS, need only 1.52% average annual inflation, which is likely considering inflation has averaged 3.06% since 1926. High-yield bonds also offer superior risk-to-reward here compared to treasuries, but like equities, the key here will be in appropriate selection to avoid high risk.