But investors are finding that CDs can have other, more lucrative uses in the portfolio. For instance: CDs can be used by investors who have a portfolio of aggressive stocks or high yield bonds – the safety of principal offered by the CD could counter the volatility of the stocks or bonds held.

CDs, especially those with short maturities, can also be used as a place to put funds until a clearer view of the market develops or strategy is created.

CDs can be used as an income producing asset because of the flexible interest payment provisions available from many bank CDs available through Legg Mason.

Some additional advantages available to investors who own bank CDs available through Legg Mason include: Safety, because Legg Mason only makes available CDs from banks and trusts whose deposits are FDIC insured. The FDIC insurance covers up to$100,000 in principal and unpaid accrued interest.

The “flower provision” on many issues which allows the estate of a holder to tender the CD to the issuing institution for redemption at par.

The various structures available in the market place offer callable and non- callable CDs, short and longer term maturities, and a variety of coupon types including step up and step down rates, and zero coupons.

Access to the national CD market enables Legg Mason to seek the best yields available from a variety of banks and financial institutions.

The ability to sell the CD prior to maturity at the current market price.

As you can see, CDs can be a useful vehicle for just about any type of investor. Whether you’re looking to shelter your money or off-set theeffects of aggressive securities, CDs can benefit your portfolio.

ALAN S. MOORE, who writes this column every Wednesday for L’Observateur, is a financial advisor for Legg Mason Wood Walker, Inc., a securitiesbrokerage and financial services firm and member of the New York Stock Exchange, Inc.

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