Market rallies, gains 36 points on election eve

The Ticker

November 03, 1992|By Julius Westheimer

Rallying on Election Day eve -- with weekend polls pointing to a Clinton victory -- the Dow Jones industrial average jumped 36 points yesterday to close at 3,262.21.

On the day President Bush was elected -- Nov. 8, 1988 -- the Dow closed at 2,130.80. The highly respected indicator is up 1,131 points, or 53 percent, in the last four years.

VOTING-DAY VIEWS: "Put 73 percent of your money in stocks, the rest in bonds, keep no cash reserve. Stocks are the best game in town." (Edward Kerschner, PaineWebber, with best Wall Street Journal performance record for one- and five-year periods) . . . "Keep 45 percent in stocks, 40 percent in bonds with a 15 percent cash cushion." (Greg Smith, Prudential Securities, top performer for last five-year period alone, in same Wall Street Journal study) . . . "Downside risk is minimal." (Addison Report) . . . "Stock market is going nowhere, with little hope for major gains." (Peter Dag Letter) . . . "Market is richer than Perot and subject to downside risk." (Plain Talk)

NO MATTER WHO WINS: "Don't reach for income. Moving into long-term bonds is risky for investors needing higher yields. Carefully selected common stocks -- Aetna, American Electric Power, Washington Water Power, etc. -- may be better." (David Dreman, Forbes, Nov. 9) . . . "I simply will not go any lower in bond quality to get higher yield." (Albert Nicholas, manager, Nicholas Income Fund) . . . "Remember that too much success in the market is in itself an excellent warning." (The late Gerald Loeb) . . . "In investing, a strong case can be made for a conservative path. A new study of mutual fund performance in the last 20 years found that conservative, equity-income funds were hands-down winners." (Steven Norwitz, vice president, T. Rowe Price & Associates.)

Summary: Of all comment I read and heard in the last 10 days, about 60 percent of it was gloomy.

BALTIMORE BEAT: Tomorrow, Rich Dubroff, producer of "Wall Street Week with Louis Rukeyser," addresses American Association of Individual Investors on the topic, "Behind the Scenes at Wall Street Week: Wall Street's Reaction to the Election" at the Sheraton Towson, dinner 6:30, lecture 7:30. Call 410-938-AAII for reservations. . . . Thursday, Nov. 5, Baltimore Security Analysts feature Times Mirror Corp., with Chairman and CEO Robert F. Erburu as speaker. It's at the Hyatt Regency at noon. . . . Westinghouse Electric appears under "Five-Star Stocks: Buy List" in S&P Outlook, Oct. 28. . . . "A Clinton victory may move stocks up, bonds down, but it will be a short-term action reflecting investors' inability to come to grips with the unpleasant reality that a long-term economic era is ending." (Rex Rehfeld, Gruntal & Co.)

FATTER WALLET: Before you invest, it's important to keep an eye on rising income as well as stock price appreciation. Here, from the S&P Outlook, Oct. 21, are "cumulative dividends as a percentage of the average price of these stocks in 1983": Baltimore Gas & Electric 120 (stated another way, if you had bought BG&E stock in 1983, you would now be receiving 20 percent income on your investment); Delmarva Power & Light 116; Dominion Resources 133; Exxon 119; Hartford Steam Boiler 166; Philip Morris 123; Potomac Electric Power 127. In addition, many of the above stocks have doubled and tripled.

MARYLAND & MORE: Jack Rosenbloom of Dean Witter (547-7027) will mail his firm's "Update," suggesting ways to find higher yields and preventing "low-interest rate shock." . . . National Business Employment Weekly, Oct. 30, has a good story, "How To Locate Positions at Fast-Growing Companies." . . . "Starting Jan. 1, if you get a lump sum retirement payout from your employer, 20 percent will automatically be withheld for taxes. What to do: starting in January, you can escape withholding by telling your employer to transfer the payout directly into an IRA rollover at a bank, brokerage firm, etc. Companies must offer you that option." (Money magazine) . . . Mercantile-Safe Deposit & Trust Co. says, "A fiscal stimulus package to boost the economy is likely no matter who wins the election. A President Clinton package would be larger than President Bush's and would have a greater chance of quick Congressional approval." . . . I will talk post-election "money" topics with you tomorrow on WBAL Radio's "Lunch With Allan Prell" at 12:15 p.m. . . . Have you given a trusted friend a power of attorney to act in case you are disabled? I strongly suggest you do this, with advice from your lawyer. . . . Question: Why do so many people stop me on the street and ask what stocks to buy, never which ones to sell?

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