Tips on investing in a shaky market

The Ticker

July 09, 1992|By Julius Westheimer

Recovering from a 25-point midday dip, the Dow Jones average snapped back before the closing bell yesterday and gave up only 2 points to close at 3,293.28. Here's a cross-section of current opinions and some advice on how to invest in this wobbly market:

TAKE YOUR CHOICE: "Bears (pessimists) have climbed to 63 percent in my guru mailbag! Without a doubt, that means new record highs." (Bower's Guru Revue). . . "A weak response to the latest interest rate cut would confirm that a bear market is under way." (Fuller Money) . . . "Long-term, despite the likelihood of an advance back to the highs, we recommend that investors respect the risk in this market." (Mercer Forecast) . . . "Stocks are not seriously overvalued based upon forecasted earnings." (Vector Vest) . . . "Through history, whenever a third party candidate ran for President, stocks declined." (Robert Stovall) . . . "A Bush victory might be good for the stock market." (Michael Metz, Oppenheimer & Co.) . . . "With economic uncertainty counteracting falling interest rates, many investors are confused about how to proceed in current market conditions." (Gail Dudack, S. G. Warburg)

WHAT TO DO: Noting the conflicting advice above and in Wall Street output generally, what should you do? My advice, summarized: Keep it simple, invest for the long pull, invest a set amount of money at specified intervals, stick to quality, diversify your holdings, avoid curbstone tips, be patient (most investments take at least a year to work out) and listen only to experienced men and women who can show a record of investment success.

BALTIMORE BITS: T. Rowe Price's Asia Fund is listed under "Second Quarter's Best Large Funds," up 14.8 percent year-to-date, in Barron's, July 6. . . . "Baltimore's Alex. Brown & Sons has lowered its earnings estimate on Nordstrom's." (CNBC News) . . . Legg Mason's July Investment Letter recommends, among other stocks, Bell Atlantic, Beverly Enterprises, Eli Lilly, Schering Plough and Telefonos de Mexico. The firm's Gerald Scheinker (486-8010) will mail a copy. . . . Phone PaineWebber's Marvin Fribush (576-3220) for the firm's 20-page "Window of Opportunity: New Strategies for Tax-Burdened Investors in Bonds, Stocks, Mutual Funds, etc." . . . A returning businesswoman told me that afternoon tea, a small sandwich and a pastry at New York's Helmsley Plaza Hotel costs $30 per person.

MARYLAND MEMOS: The Rothschild Co., in its July 1 letter, "What's Wrong With This Picture?" says, "The economy is improving, earnings are rising, short-term interest rates are low and there is a record money inflow into stocks. The Dow Jones average is near its high and yet most stock investors lost money in the first half of 1992." For answers, write the firm for the letter at 32 South St., Baltimore 21202, or phone 539-4660 . . . Maryland Comptroller Louis Goldstein has a letter in Financial World, July 7, which reads, in part, "Thanks for rating Maryland one of the top four states in the last three years. We mentioned that to the rating agencies with reference to our AAA rating. And at our recent bond sale the low bid was 5.8 percent, the lowest rate since 1974."

LOOKING AHEAD: Tomorrow, "Wall Street Week with Louis Rukeyser" discusses "How a Quant Thinks," with guest Richard Bernstein, Merrill Lynch's quantitative analysis manager, and panelists Martin Zweig, Louis Holland and Gail Dudack. . . . Beginning Saturday, July 18, WBAL-TV (Channel 11) will broadcast weekend news on Saturday and Sunday mornings from 8 a.m. to 12:30 p.m., including segments about your money. . . . If you're expecting a retirement check, watch for your incoming mail. A local 40-year retiree of a large company received about 11,000 shares of the company's stock (value $660,000) in an unsealed brown envelope marked in the upper left-hand corner "Company Plans: Important," and a P.O. box number, looking like those "clearing house" envelopes telling you how many millions of dollars you've allegedly won. . . . Wednesday at 12:15 p.m., I'll answer questions on WBAL Radio's "Lunch With Allan Prell."

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