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Liquid Instruments Gaining Increased Percentage of U.S. Capital Markets.

HOUSTON -- The percentage of investors' assets allocated to liquid instruments rose beginning this month to the highest level since October 2004, according CPMKTS(SM) The Capital Markets Index, the first and only measure of the total return of the U.S. investment grade capital markets. The increased percentage for liquid instruments - short-term money market issues such as Treasury bills, certificates of deposit and commercial paper - continued amid sharply vacillating equity prices and increasing interest rates.

The Capital Markets Index, created by Dorchester Capital Management Company of Houston, is carried on The American Stock Exchange under the symbol CPMKTS with updates every 15 seconds. The Amex also publishes sub-indexes CPMKTE, CPMKTB and CPMKTL, tracking equities, bonds and liquidity, respectively. Dorchester utilizes market data and government statistics to adjust the weights used in calculating CPMKTS, ensuring the index accurately reflects the total return of the markets, based on actual asset allocation available to the investor. The indexes are available on investor, financial and media web sites.

"The U.S. capital markets, starting in May 2006, saw 16 % of the market's total value - approximately $4.52 trillion - invested in liquid instruments," said Warren Schmalenberger, founder and chief executive officer of Dorchester. "The May figure was up $149 billion from April. This represents the highest percentage since liquidity comprised nearly 16.4% of the capital markets' value in October 2004."

Dorchester noted the increased percentage for liquid investment occurred before the period in which equity prices were especially volatile: the Dow Jones Industrial Average tested its six-year highs, while the Nasdaq Composite Index hit a new yearly low May 16.

The increased liquidity percentage contrasted with bonds, Dorchester said, with the percentage of investors' assets invested in investment grade bonds totaling 31.1% of the capital markets at the beginning of May 2006, down from nearly 32.1% at the beginning of February. The May bond allocation percentage is the lowest since August 2002. The percentage of the capital markets invested in equity securities stood at 52% in May 2006, down from 66% six years earlier.

The investment grade market capital market stands at a record $28.2 trillion.

Dorchester Capital Management Company is a Houston-based company principally focused on designing financial products for the professional investment community. For additional information, please visit
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Publication:Business Wire
Date:May 19, 2006
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