Richard C. Young & Co., Ltd. gains fixed-income exposure through investments in U.S. Treasury securities, low-cost, no-load, no 12b-1 bond funds, individual municipal bonds, and preferred securities. Fixed-income securities are necessary to the diversification of most portfolios. Diversification is a powerful ally for successful long-term investing and comfort.

• Treasuries: Your money is 100% invested in U.S. Treasury securities -- regarded by many investors as the safest investment in the world and backed by the full-faith-and-credit pledge of the United States Government. We analyze economic, monetary, and market variables to help determine an ideal strategy to meet the program's objectives of income and/or capital preservation.
• Bond Funds: Bond mutual funds provide investors with the scale required to build a diversified portfolio of fixed-income securities that are typically only available to large institutional investors. We focus on no-load, no 12b-1, low-cost bond funds.
• Corporate Bonds:  A bond issued by a corporation to raise money for a corporate purpose. Corporate bonds generally have a maturity date falling at least a year after their issue date. Corporate bonds generally have a higher risk than government bonds and thus offer a higher yield.

The chart below shows annual returns of Dodge & Cox Balanced and Vanguard Wellesley Income funds. Each fund contains a mix of stocks and bonds. The returns assume an investment of 50% in Dodge & Cox Balanced Fund and 50% in Vanguard Wellesley Income Fund, with annual rebalancing. From 1995 through 2006, the combination has not experienced a down year.

The figures appearing above do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, which would lower these figures.