To achieve our investment goals, we use U.S. Treasury STRIPS as our principle vehicle. Because Treasury obligations are backed by the full faith and credit of the U.S. Government, they are considerably safe investments. We believe that certain types of Treasuries offer greater potential for appreciation than others during favorable market conditions. Investments are made in Treasury Bills and short term Treasury Notes while we are awaiting these favorable conditions to again re-enter the market.

The key to the success of the Program is identifying the trading range of U.S. Treasury Bonds. When interest rates rise to an attractive level, determined by analysis, 20-22 year Treasury STRIPS are purchased. These bonds are then sold when their yield to maturity (YTM) declines 30-50 basis points. The average holding period of the bond has been nine-months. We call process of buying and selling the long bond a "round trip."