Investors' worries push Dow down 13

The Ticker

June 08, 1993|By Julius Westheimer

Apprehensive about higher interest rates, a new whiff of inflation and the probability of a steep rise in income taxes, investors turned cautious yesterday. The Dow Jones industrial average slipped 13.01 points to close at 3,532.13.

IN PERSPECTIVE: "I shall never forget the day I went to Father and told him I was worth a million dollars. His kindly face took on a quizzical expression. Thinking he might be questioning the accuracy of my accounting, I offered to show him the actual stocks and bonds. 'No,' he said, 'I'll take your word for it,' and began to talk of something else. Father always regarded money-making as secondary to moral values and one's usefulness to the community." ("My Own Story" by Bernard Baruch, 1870-1957)

BALTIMORE VIEWS: "I'm wary of stocks near term, but Wall Street is where your money should be long term. Go for high-dividend stocks because they provide a cushion. I like electric utilities, Chevron and Mobil Oil." (Frank Cappiello, local mutual fund executive) . . . "As froth creeps into the market, investors must lower their expectations. We'll get 10 percent a year now as opposed to 18 percent we've been receiving. The 'winners' circle' of stocks will get smaller. I like Ford, Chrysler and MCI." (Eddie Brown, Baltimore-based investment adviser) . . . Legg Mason's "Investor's Dozen" includes AmeriCredit, Baxter, Humana, IMO Industries, Instrument Systems, Magma Copper, Premark, Public Service Group, Telefonos de Mexico, United Illuminating, UST, Waban.

HOPEFULLY HELPFUL: Because higher rates in the Clinton tax bill will be retroactive to Jan. 1, 1993, you might wish to either amend your June 15 estimate or put money aside to earn interest until April 15, 1994. Check with your accountant promptly. The House-passed bill raised rates from 31 to 36 percent and, in some cases, to 39.6 percent. . . . "Letting your bank pay your bills can be dangerous. Biggest danger: It's too easy to lose track of your finances, and spend far beyond your means." ("The Bank Book" by Edward Mrkvicka, $21.95) . . . "Best investments for those who don't have time to watch them include U.S. savings bonds, unit investment trusts (fixed portfolios of income-producing securities), tax-free municipal bonds and international mutual funds." ("Low-Risk Investing," Gordon Williamson, $20)

JUNE JOURNAL: "Advice to college students: Jobs this year will go to students who show initiative. Students seeking internships this year should not rely solely on their college placement offices. Also, tap parents, other relatives and friends for job suggestions." (Patrick Scheetz, director, College Research Employment Institute) . . . "The most common retirement traps are 1) Relying solely on income-oriented needs; 2) Investing a lump sum all at once; 3) Engaging in investment clutter -- holding too many securities; 4) Falling prey to a 'snake oil' salesperson; and 5) Thinking that estate planning is no more than a will." ("The Complete Book of Trusts" by Martin Shenkman, $19.95)

YOUR MONEY: "You can protect yourself against higher mortgage rates by locking in present rates immediately, paying more points (you 'buy down' the rate by paying more points -- a point is 1 percent of the loan amount), getting an alternate mortgage (lenders have varieties of types of mortgages), considering an adjustable rate mortgage and by shopping around, namely, looking for the lowest combination of fees, points and rates." ("100 Highest Yields") . . . "The same house can cost $280,000 or $415,000, depending on whether you take 15-year or 30-year financing. Compound interest works against you when you owe money. Best advice: Take loans for shortest manageable term." ("How to Take Control of Your Personal Finances" by Andrew Feinberg, $10)

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