OUR BOND PHILOSOPHY

Tower employs a "passive" bond investment philosophy when managing investment grade bond portfolios. A typical portfolio will be structured using a "laddered" bond portfolio. A "laddered" bond portfolio consists of equal dollar amounts of bonds maturing annually over
a certain time period. This protects the bond portfolio from interest rate changes, while providing the account with a stable stream of income. Some of the important factors to consider before tailoring a bond portfolio are:

	Tax status of account
	Income required from portfolio
	Credit quality (Investment Grade or Below Investment Grade)

The tax status of an account is important. Most high tax bracket accounts will be placed in municipal bonds, while low tax-bracket or non-taxable accounts will be invested in government or corporate bonds. The level of income required may also be an important factor, particularly when deciding how much of your portfolio should be allocated to bonds versus common stocks. Credit quality is carefully monitored and managed according to the risk profile of the account.

WHY INVEST IN BONDS?

Bonds are an integral part of an investment portfolio. Bonds provide safety, income and diversification. Most investors buy bonds to meet income requirements over specific time periods. Some of our accounts need monthly or annual income, and bonds are an excellent investment for high current income. Another common reason to invest in bonds is the higher level of principal safety. One of the more important measurements of a bond's safety is its "creditworthiness", or the level of comfort an investor has with the issuer's ability to pay both interest and principal on a timely basis. Investment grade bonds offer investors a high level of comfort, while below investment grade offers less.

WHY HAVE TOWER MANAGE YOUR BOND PORTFOLIO?

Tower employs a team of fixed income specialists. Our investment managers are skilled at "tailoring" bond portfolios to meet your safety and income requirements.