American Investment Services, Inc.

Disciplined, Diversified, & Cost Effective

Jan. 2011 – New Year’s Resolutions

Patient investors were amply rewarded in 2010, but it was a rough ride (see our chart on page 6). Investors who adhered to the principles below would have avoided impetuous decisions that so often spell disaster for individual investors.

• I will understand my own circumstances and formulate an investment plan based on my needs, not in anticipation of market trends.

• I will remind myself that investing is not a form of entertainment—if I have an urge to gamble, I will go to Las Vegas.

• I will stick to my plan.

• I will not attempt to pick winning stocks.

• I will ensure that my holdings are adequately diversified within each asset class I own.

• I will focus on minimizing my investment-related costs.

• I will stay abreast of changes in investment-related tax laws.

• I will not purchase any financial instrument I do not understand.

• I will ignore money managers or others selling products rather than advice.

• I will ignore market prognosticators.

• I will take full advantage of my qualified retirement plans by making the maximum allowable contributions I can live with.

• I will hold my least tax-efficient assets in my tax-deferred accounts.

• I will rebalance my portfolio infrequently, but at regular intervals regardless of the current state of the markets.

• I will not allow the price I have paid for a security to influence my future investment decisions—except for tax considerations regarding capital gains and

• At year end I will harvest tax losses simply and without ever deviating from my portfolio’s target allocations, by selling and buying index-type funds within the same asset class.

• I will appreciate the simplicity of the AIS approach; instead of worrying about factors that are not within my control, I will establish my plan and turn my attention to enjoying life.

Also In This Issue

Quarterly Review Of Investment Policy
Municipal Bonds Risk: Face And Embrace
Tax Relief Act Summary
The High-Yield Dow Investment Strategy
Recent Market Statistics
The Dow Jones Industrials Ranked By Yield
Recommended Investment Vehicles