Our investment approach consists of fundamental analysis, as opposed to technical or quantitative strategies. We study company financial statements and reports, industry trends and conditions, and general business conditions. Principal sources of information are (1) the company's annual report, prospectus, Form 10-K and press releases, (2) various trade publications, (3) general business periodicals, newspapers and the internet, (4) brokers' reports, and (5) meetings or phone conversations with company officers.

Common stocks provide the potential for growth and contribute a steadily rising income stream as dividends increase. Typically, we maintain the stock portion of a client's portfolio with a target of 60% of the total value of the account. Other targets are occasionally utilized to meet specific client needs. Our approach to stock selection is conservative and income-orientated, concentrating on financially strong companies with medium to large capitaliza­tions. We generally select stocks paying dividends, where our fundamental analysis suggests good prospects for additional profit and dividend growth. A typical portfolio contains 20 to 25 stocks.

The bonds in a portfolio normally reduce volatility while providing a higher rate of current income and liquidity. We select high quality bonds, mostly U.S. Government issues, with maturities ranging up to 12 years. Usually, about 30 to 35 percent of a portfolio is invested in bonds. When appropriate, we will hold a mixture of U. S. Government issues and municipal bonds in taxable accounts. In tax-free accounts, we sometime utilize high quality corporate bonds. Assets not invested in stocks or bonds are invested in cash equivalents including money market funds and Treasury bills, in order to maximize short-term returns.