In addition to managing all equity portfolios, we structure balanced portfolios to accommodate our
clients. We view bonds as a store of value. They are included in portfolios to provide safety, liquidity
and a stable stream of income on a favorable after-tax basis.

Bonds are selected based on the following criteria:

· Interest rate outlook
· High-quality credit rating
· Client’s tax status
· Interest Rates

We study macro-economic data, including GDP growth, fiscal monetary and regulatory policy,
the outlook for inflation and global capital flows to determine long and short-term expectations for
interest rates. Our bond management policy is set according to this analysis. We position bond
portfolios to take advantage of the inflection point of the yield curve. When we anticipate significant
changes in interest rates, we will reposition bond holdings.

Credit Rating

We purchased bonds rated investment grade or better. Securities utilized include those of the
following: U.S. Treasuries, state and local governments, including U.S. territories, authorities and
agencies; and high-quality corporations.

Tax Status

The client’s income tax status plays a major role in determining the relative attractiveness of bonds.
Interest on bonds issued by states and local governments are excluded from Federal income tax,
while Treasury issues are exempt from state taxes. We calculate the after-tax income securities
issued by a variety of institutions in order to identify the ones that, allowing for credit quality,
diversification and liquidity, are most attractive to individual investors. We then purchase the securities
that will provide clients with the best results.