High Quality Bonds

Schultz Financial Mgmt Corp

Risk-Controlled Portfolios for Serious Investors

High Quality Bonds

Folio Statistics

(As of 12-30-2005)

	Long-Term Taxable Bonds	Morningstar Long Govt Average
2005 Return	5.17%	3.45%
2004 Return	13.23%	7.82%
2003 Return	13.76%	2.44%

Investment performance figures are based on actual results of a representative client. These figures do not include our investment management fees.

Objective

For the "core" portion of our client's portfolio allocated to high quality bonds we will invest in individual bonds or bond funds with consideration given to credit risk, yield, maturities, and tax implications. The objective is to provide stable income with safety of principle.

By owning individual bonds rather than bond funds, investors can be sure that they will receive a full return of principal if they hold their bonds to maturity. This can be very beneficial if interest rates continue to rise after the bonds are purchased.

Investment Approach

Because our client's participate heavily in corporate bonds through our Timed Bond Strategy, we primarily invest in the AAA rated agency bonds, treasury bonds, or municipal bonds for our clients.

Each client portfolio is individually tailored based upon their tax bracket, type of account, and need for income, while also evaluating which bonds present the best value at the time we purchase them.

Bond Ladders

We help our client's minimize the effects of interest rate fluctuations by creating a bond ladder.

A bond ladder is a portfolio of fixed income securities with maturities staggered at regular intervals.

Since interest rates are bound to rise and fall, a bond ladder can help to reduce market fluctuations and create a more stable, predictable income stream from our clients' bond investments.

The cash that becomes available as bonds mature can be used for reinvestment or as a resource to pay for living expenses during retirement.