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How’s Business? Investments for a new year

By Joe Palumbo III

Rising oil prices, coupled with a housing market that has gone bust, has threatened the status of our economy.Historically, there is usually a strong correlation between housing busts and oil shock recessions.The securities bond market for those on fixed income investments can always be a concern, because variations can drastically affect your overall portfolio and cost of living. So what do you do in 2007 if you are looking for solid fixed income investment? Vanguard Total Bond (VBMFX) can be a very good play. Vanguard has a very solid reputation, with an impressive assortment. Metropolitan Total West Return (MWTRX) also a solid play, has approximately a $2 billion fund with an expense ratio of .065 percent and is averaging an impressive five-year return of approximately 5.25 percent. Yet another strong choice for review is Harbor Bond (HABDX) holding a $2.3 billion fund with annual expenses of 0.58 percent and boasting an inspiring 5.59 percent average return over five years. One last fund of notability is the Vanguard Inflation-Protected Securities Fund (VIPSX) which has a 0.2 percent expense ratio and a 7.31 percent five-year return. For high tax bracket investors, tax-free municipal bonds are always a smart choice. Year to date, they hold their own with taxable peers, but provide a much better return on an after-tax basis.So How's Business in regards to fixed income investments? Bonds are viewed at most as a plain asset that generates steady returns. More attractive yet are that bonds balance portfolios because they are a reliable income stream with the safety of principle. For those searching for fixed income investments for 2007, these are all definitely worth a look.Joseph J. Palumbo III can be reached at 516-248-0256 or also visit www.palcogroup.com.

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