Think small, think technology, think global

Andrew Leckey

November 10, 1993|By Andrew Leckey | Andrew Leckey,Tribune Media Services

Don't let the future sneak up on you.

With the Dow Jones industrial average so capable of dramatic highs, and with investors worried about sudden declines, now's the time to consider investments likely to play an important role in the long-range future.

Such choices aren't for folks with six-month or one-year time horizons, but rather those seeking new extended trends with the intent of hanging on for dear life, braving volatility along the way.

If your investment goals extend well into the coming century, think small, think international and think technology.

"The end of the cold war means cheap labor, and, with greater worldwide competition, low inflation is here to stay," said Edward Yardeni, chief economist for C.J. Lawrence.

Motorola Inc., despite the recent resignation of Chairman George M.C. Fisher to go to Eastman Kodak, is one of Yardeni's stock recommendations. Also likely to post big gains is Hewlett-Packard.

"Stock markets in this country will be dull, while others in Mexico or Argentina will be stronger," predicted Charles Clough, chief investment strategist for Merrill Lynch & Co. "Nursing care and technology will do best domestically."

Nursing care companies such as Living Center of America and Genesis Health Ventures will benefit from an aging population, he believes.

"Smaller stocks or overseas stocks offer greater risk, but should outperform blue-chip stocks that have done well the past decade," advised John Rekenthaler, editor of the Morningstar Mutual Funds investment advisory.

He likes Acorn International Fund, up around 40 percent over the past 12 months. It emphasizes smaller overseas companies, particularly in Asia.

"Entire industries will change much faster than in the past, with technology, communications and software especially important," said Arnold Kaufman, editor of Standard & Poor's Outlook.

Thermo Electron Corp., designer of cogeneration plants, and Chips and Technologies, supplier of integrated computer circuits, are his choices.

"Investment return from stocks in the United States will be 1 or 2 percent less than the 10 to 11 percent we've experienced in the past, for this is becoming a more mature society, compared to PTC faster-developing areas," said Norman Fosback, president of the Institute for Econometric Research in Fort Lauderdale, Fla.

His selections, Granite Construction and Kasler Corp., will build roadways and bridges of the future.

"As the baby boom generation gets older, it will have more kids to buy for, and it will do a very good job of investing," said John Rogers, president of Ariel Capital Management.

Playing the nationwide trend toward greater security, Rogers likes Borg-Warner Security in guards, alarms and armored transport, and Central Sprinkler in sprinkler-head manufacturing to combat fires.

"The aging population will be saving more, which is good for investments such as stocks," said Louis Navellier, editor of MPT Review investment letter.

Noting the explosion in technology and communications, Navellier suggests MCI Communications, DSC Communications and InterVoice Inc.

"Biotechnology breakthroughs will continue, and will be much more important in the new competitive health care environment," said James McCamant, editor of Medical Technology Stock Letter.

Chiron Corp., a biotechnology leader in important serum and vaccine programs, is a favorite.

"You can no longer generalize about real estate, for selecting specific properties is now the key to success," said Barry Vinocur, editor-in-chief of Realty Stock Review. "Biggest event for the future is securitization of real estate through real estate investment trusts (REITs)."

His favorite REITs traded as stocks are Property Trust of America and Merry Land & Investment Co.

"While variable annuities will play a big role in the future, they'll never be as big as mutual funds," said Jennifer Strickland, editor of variable annuity publications for Morningstar. "This long-term investment will become increasingly important to individuals who have already explored their other options."

In variable annuities, she likes Franklin Valuemark II, especially its Income Securities portfolio and Utility Equity portfolio, and Best of America IV, which includes Fidelity and Strong mutual funds.

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