By the end of August, however, the timing of Fed ease became less certain. We decided at that time to extend the average maturity while maintaining the historically necessary liquidity for year-end. The average maturity peaked at the end of October at 81 days. This strategy paid off as we look at the yield curve on December 31, 2000. There is no doubt that a meaningful economic deceleration is upon us, but the actual pace and the anticipated duration are hotly debated.
Economic uncertainty breeds volatility in the market.
The LGIP s strategy going forward will be to extend investment maturities when longer term buying opportunities present themselves. The Portfolio Manager s views are subject to change at any time based on market and other conditions.