First few Article Sentences
During these volatile times in the financial markets, investors are wondering where, other than Treasuries, fixed income portfolio allocations should be made. This question is especially important after the downfall of storied investment institutions like Merrill Lynch, Lehman Brothers and Washington Mutual. One answer involves shifting investment goals from incremental outperformance to preservation of principal. Diversification provides meaningful risk reduction and would support this new goal. Basic diversification involves investing across the various fixed income sectors, as well as within each sector. For example, investment selections could be made among several issuers in the corporate sector, different types of municipalities in different states, and various types of collateral within the structured product sector.