William V. Jeffries, Fallston, has won first prize in our 1991 Dow Jones forecasting contest with his entry of DJ 3,170, fewer than two points from the 3,168.83 final figure. When Jeffries and other contestants submitted their predictions early in January, the Dow stood around 2,700. The Dow gained 535 points, or 20 percent, in the astonishing year just ended.
Reached at his home yesterday, Jeffries, a retired federal employee, said, "I picked my number by taking your forecast of 2,750 plus 9 others and averaging them." Instead of taking first prize of dinner for his wife and himself, he generously asked me to donate the money in their names to a soup kitchen.
Second prize by a coin flip goes to Dorothy Achor, Westminster, who, along with Vince DiVenti predicted DJ 3,160. Achor said, "I don't know too much about stocks, so I took '31' from my birth year of 1931, added my age, 60, and came up with 3,160." She added, "Very scientific, wasn't it?"
Next crystal ball gazers, in order, are: Tom Creagher, Timonium (3,178); Colleen Kahla (3,180); Paul Vacek Jr., (3,147); Rose Terracina, Catonsville (3,191); Doris Hayes, Ocean City (3,195); Betty Lou Kelly (3,195); Lawrence Goldberg (3,137); Violet Reed (3,132); George Bawer (3,131); Steve Wilson, Mount Airy (3,131); Sam Kahan (3,131). All are from Baltimore unless noted.
In our "expert" category (bankers, brokers, investment advisers, media stars, etc.), Mark Dyer, my business associate, and Dr. Jeffrey Schein, my dentist, tied for first place with their DJ 3,150 predictions. Runners-up are Monte Gordon, retired portfolio manager, Jack Wasserman, real estate executive and Richard Barbarita, PaineWebber office manager.
Analysis: Only 7 percent of our readers guessed too high, 93 percent too low. Among the "experts," only Channel 2's Andy Barth came in too optimistic, but 52 professionals undershot the mark.
Stay tuned for the 1992 contests with expanded prize lists, details of which will appear here one week from today, with dozens of predictions by local and national crystal ball gazers.
1992 ADVICE: (1) Maximize your tax-deferred retirement programs, where money grows much faster than in your taxable non-retirement accounts. And at retirement, I suggest that you take a lump-sum payment instead of accepting other options because you have more flexibility with a lump sum and probably better inflation protection.
(2) Consider EE savings bonds, where today's 6.3 percent interest rate far outpaces inflation and other rates. Also, interest is free of state and local taxes.
(3) At this Wall Street level, calculate your "risk-reward" ratio before investing. Ask yourself, "What's the risk at this level? What's the reward?."
(4) Stick to quality.
(5) Diversify your assets.
(6) "Stagger" your certificate of deposit and bond maturities.
(7) If you can't decide whether or not to sell a "good" stock, sell half.
(8) Buy stocks for dividend growth as well as for capital appreciation.
(9) Be patient. Most investments don't grow for at least six months to a year.
(10) When beginning, pick stock mutual funds with a strong three- to five-year record.