Merrill Lynch expects rates to turn down in 1989, and the firm favors longer-term bonds, especially 20-year issues.

In the past few weeks, the Street seemed to favor bonds.

Wherever you come down on the risk gauge, valuations seem to favor bonds.

For instance, a weak or slowing economy favors bonds.

Second, many planners have been taught that if you must choose assets for a tax-deferred account, you should favor bonds.

Mr. Atteberry said that he did not favor lower-quality bonds, either.

"If people had to buy something, I would favor bonds rather than stocks."

He has favored bonds while the stock market has been rising at double-digit rates.

Many funds buy only stocks, while others favor bonds.

But within that range of economic outcomes is a middle ground that favors bonds.