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To: chomolungma who wrote (173294)	3/5/2003 4:07:55 PM
From: Jim McMannis	Respond to of 186894

RE:"Unfortunately 20 yr. T-bonds are now yielding about 4 3/4% and this is taxed at ordinary rates and every year. You could increase this by buying corporates, but then you add risk. Also long-term fixed securities have a good deal of inflation risk. If we have 5% inflation, what do you think someone is going to pay you for the above security? Not much! Want to get rid of that inflation risk? OK, now you're left with T-bills and have to settle for sub 2% returns and historically these have barely matched inflation giving you a real return of 0% and if taxable a negative return. Given the above, is it any wonder that equities will still be the investment that many choose. They are willing to take the risk to get the historical performance that equities have provided over the long haul, and in my opinion, will continue to provide." You hit a nail on the head. Virtually impossible for anyone to maintain their lifestyle based on fixed income. They will try. They will likely fail. Based on history and low rates, money should be pouring into stocks. It is not. Scared it will get a lot worse. DOW is still high and they say the NASDAQ is too. The skinning of the sheep is too fresh in their memories. Yet they will be skinned again in other ways. Jim