| At
the time of our Outlook, we viewed yields as artificially low due to a flight
to safety into bonds during the subprime crisis. Rather than being a short-term phenomenon, the flight to safety
into bonds has persisted over the last few months as investors have fleed
stocks in the face of a weakening economy, falling housing market, and
soaring commodity prices. Despite
their safe haven status, we do not believe Treasuries offer a good value at
this time given that they yield less than the rate of inflation. |