American Investment Services, Inc.

Disciplined, Diversified, & Cost Effective

Nov. 2007 – The Investment Guide: New Recommendations, New Look

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We have changed the “back page” of the INVESTMENT GUIDE in order to provide you with more useful information regarding our recommended investment vehicles. We have also changed our recommendations considerably following a careful review of investment vehicles available for each of our recommended asset classes.

We have eliminated or replaced several recommended investment vehicles. These include: Duff and Phelps Select Income fund (DNP), iShares S&P500 Value Index fund (IVE), iShares Small Cap 600 Value Index fund (IJS), iShares S&P500 Growth Index fund (IVW), and iShares Emerging Market Index fund (EEM). Readers should not be alarmed; there is no need to rush out and sell these previously recommended securities. We have reviewed the entire universe of available investment vehicles and from these we have chosen the best available within each of our recommended asset classes. In most cases the “margin of victory” for the recommended investment vehicle was very slim; our previous recommendations are still excellent investment vehicles (in taxable accounts these remain ideal candidates for year-end “tax swapping”).

DNP merits further discussion. The fund invests primarily in utility stocks, but also holds preferred stocks, bonds and REITs. It is also a leveraged, actively managed closed-end fund. It is inconsistent with passive, asset class investing, so it no longer appears among our recommendations. The fund is, however, valuable in certain accounts, including many trusts, which have an explicit interest in generating investment income (interest and dividends). Readers who continue to hold DNP can get more information by visiting the fund’s website at http://www.duffutility.com.

Before we explain these changes in greater detail, a review of our approach to investing is in order.

Also In This Issue

Bond-Rating Agencies Under The Microscope
The Investment Guide: New Recommendations, New Look
The High-Yield Dow Investment Strategy
Recent Market Statistics
The Dow Jones Industrials Ranked By Yield
Recommended Investment Vehicles


American Investment Services, Inc. (AIS) is an SEC Registered Investment Adviser* founded in 1978.

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*Registration with the U.S. Securities and Exchange Commission does not imply a certain level of skill or training.

The information provided does not constitute investment or tax advice and it should not be relied on as such. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. It should not be considered a solicitation to buy or an offer to sell a security. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and AIS shall have no liability for decisions based on such information.

Any mention of commercial products or reference to commercial organizations is for information only; it does not imply recommendation or endorsement by AIS nor does it imply that the products mentioned are necessarily the best available for the purpose.