With one eye on the Little Rock economic summit and the other eye on Wall Street, investors turned cautious yesterday. The Dow Jones industrial average slipped 11.88 points to close at 3,292.20 on moderate volume of 187 million shares.
TAKE YOUR CHOICE: "The ultimate high should be near mid-December. From that high, the Dow Jones industrial average should drop around 500 points into early February." (P. Q. Wall Forecast) . . . "I detect a subsurface buildup of evidence pointing toward a significant decline ahead. The battle cry is 'sell into strength.' Smart money is rapidly heading toward the exits." (Granville Market Letter) . . . "Profit-taking should now set the stage for the Dow to rally to past its record high of 3,413.21. Five out-of-favor Dow megastocks are unfavorably impacting its performance, having a year like Woody Allen, Queen Elizabeth II and George Bush." (Green on Money)
FREE ADVICE: I will give you individual investment advice if you bring groceries and/or money to Our Daily Bread soup kitchen, 411 Cathedral St., corner of Franklin (across from the Enoch Pratt Free Library), on Sat., Dec. 19, between 11 a.m. and 1 p.m. Now serving over 800 (!) meals a day, 365 days a year, O.D.B. is running short of coffee, peanut butter, cereal, sugar, fresh fruit, canned goods and cash.
START EARLY: "If you are saving for retirement, you can invest a lot less and get a lot more if you start your investment program early. If you start investing $2,000 a year from age 22 and earn at least 7 percent a year, you could stop investing by age 30, and by letting the money compound until you retire you would accumulate much more than if you started later. And start early in the year! Beginning at age 25, if you deposit $2,000 on the first day of the year you'll have $687,000 by age 65 but if you wait until the last day of the year you'll have only $602,000." (Moneypaper, Dec.)
HOPEFULLY HELPFUL: "This time of the year investors sell stocks for tax losses and their loss can be your gain. Tax-loss selling can knock a stock's price down to an undervalued point, so why not buy quality bargains now and sell them a few months later when their prices rebound?" (The Cheap Investor) . . . "Students do much better in college when they form alliances with fellow students, faculty members and student advisers." (5-year Harvard University study) . . . "Did you realize that the stock market is up 30 percent in the last two years?" (Irwin Kellner, economist) . . . "Tax-free money funds are yield boosters for people concerned about continuing low money-market rates. They provide significantly higher taxable-equivalent yields than taxable funds." ("Income and Safety" by Norman Fosback)
MONEY MATTERS: "Contribute as much as possible to your company's 401(k) pension plan. The money you save is in pretax dollars and tax on earnings is deferred until you start withdrawing money after retirement. Net effect: $7,000 of earnings saved annually for 30 years and invested in a CD or government bond grows to $379,000 outside a pension -- but grows to $793,000 (no misprint) inside one, almost twice as much." ("Lew Altfest Answers Your Questions About Money," McGraw Hill, $19.95)
MIDMONTH MEMOS: Because many tax rates and regulations will change on Jan. 1, 1993, be sure to see your accountant or tax lawyer promptly. You can make some moves this year that will save money . . . "Points -- prepaid interest charges on mortgages -- are shrinking, if not vanishing, a boon to buyers who can borrow for less and drive a harder bargain on price." (Kiplinger's Personal Finance Magazine, Jan. 1993, in "Driving a Bargain on Mortgage Points.") . . . National Business Employment Weekly, on newsstands this week, runs a helpful article, "Should You Accept an Early-Retirement Offer?" ("Go ahead if you're ready to enter the job market . . . One former executive says she earns more as a consultant than she did full time.") . . . Tomorrow, 12:15 p.m. till 1, I'll answer your year-end financial questions on WBAL Radio. Phone 467-WBAL. . . . "Great stocks to buy for next year include McCormick, Bemis, Hershey, Seagram, G.E., Sherwin Williams, Pfizer, American Home Products and Smithkline Beecham." (Money, 1993 Forecast)