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Searching For Yield: The Top Picks

SECURITY/                                                     CURRENT
RECOMMENDATION       RATIONALE                                YIELD

U.S. GOVERNMENTS  Set up a maturity ``ladder'' by spreading   6.25% to
U.S. Treasuries-   funds out in roughly equal portions        6.85%
2 to 10 years

MUNIS             Credit quality is improving with a          6.05%
California         healthier California economy
General Obligations
(due 2021)

FOREIGN            A possible capital-gains play, since the   7.65%
10-year Canadian    rates there could drop further
Government Bonds

MORTGAGE-BACKED    Rates probably won't fall enough           6.96% to
Fannie Maes         to present any prepayment risk now        7.02%
10-20 years

REITS              Not for everyone, but a possible hedge     8.24%
Essex Property      if the stock market corrects
Trust

HIGH YIELD         A possible takeover play for high         10.21%
Showboat Inc.       rollers; others should stick to funds
single B
13% coupon

EMERGING MARKETS   Fast growth, with declining inflation in   Approx.
Emerging Market     many developing countries                 10.50%
Fixed Income
Mutual Funds

DATA: SURVEY OF MONEY MANAGERS; BLOOMBERG FINANCIAL MARKETS


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Updated June 14, 1997 by bwwebmaster
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