Analysts stack 10 grand many ways

December 15, 1993|By Andrew Leckey | Andrew Leckey,Tribune Media Services

How would you invest $10,000 in the coming year?

Each year I pose that query to a diverse group of investment pundits.

This year's group exudes strong confidence about a resurgence in the stocks of some brand-name American firms, as well as an affection for overseas investing. But any optimism about the overall U.S. stock market and economy is rather tepid.

Here's the advice for that theoretical 10 grand in 1994:

* Marshall Acuff, chief portfolio strategist for Smith Barney Shearson:

"I'd use the $10,000 to put together a stock portfolio that includes General Electric, Caterpillar Inc., McDonald's Corp., Procter & Gamble, United Healthcare and May Department Stores. These companies over the next five years should have double-digit earnings growth that outstrips the nationwide industry average. The U.S. economy will continue on a moderate growth track in 1994, with much of the expansion in capital equipment spending and some in consumer spending."

* Dan Sullivan, editor of the Chartest investment letter, Seal Beach, Calif.:

"I'd put the entire $10,000 in a money-market fund or 91-day Treasury bills because I think 1994 is going to be a tough year. The stock market is overvalued by all historical measurements and the public is buying mutual funds with reckless abandon. Rather than thinking of how much money I can make, I'd be more concerned with preserving capital. Keep in mind that, in the 1969 through 1981 period, growth mutual funds had a compounded yearly gain of 4.1 percent vs. 7.5 percent for 91-day Treasury bills."

* Ross Levin, president of the International Association for Financial Planning and head of the Minneapolis-based Accredited Investors financial planning firm:

"I'd place $2,500 in the well-diversified T. Rowe Price International Stock Fund of Baltimore, $2,500 in the small-capitalization Royce Fund Premier Series of New York, $2,500 in the large-capitalization Schafer Value Fund of Princeton, N.J., and $2,500 in Dodge & Cox Balanced Fund of San Francisco. Their value-oriented managers buy stocks which are out of favor or relatively inexpensive, a good strategy for this time in which we're still in a little bit of a recession."

* Don Phillips, publisher of the Morningstar Mutual Funds investment advisory:

"The entire $10,000 would go into The Yacktman Fund, which features great American companies such as Johnson & Johnson, Liz Claiborne, RJR Nabisco, Dow Jones & Co. and Reebok International. A lot of these firms with brand-name products have been out of favor, and this is a good time to buy them at good prices. As emerging markets begin to flourish, they're going to want American products. This 'no-load' (no initial sales charge) fund is based in Chicago."

* Byron Wien, U.S. investment strategist for Morgan Stanley:

"I'd put $2,500 apiece in Chrysler Corp., Citicorp, Intel Corp. and USX-Marathon Group. There's been a change of leadership in the stock market toward economically sensitive stocks and away from consumer nondurable stocks. The market is going through a corrective phase and now is a good time to identify some attractive values in groups such as autos, energy, banks and semiconductors."

* John Markese, president of the American Association of Individual Investors, Chicago:

"I'd invest abroad with the $10,000, for I expect fairly slow growth for the U.S. economy in 1994. I'd put $5,000 in a regional Latin American fund that covered Mexico, Chile, Argentina and Brazil, and the remaining $5,000 in a regional Far East fund that covered Malaysia, Thailand, the Philippines and Indonesia. Of course, this is an aggressive move, so I wouldn't do it if this was my entire portfolio."

* James Annable, chief economist of First National Bank of Chicago:

"I suggest a 'vanilla' portfolio for my $10,000, with two-thirds in a nicely diversified stock fund and one-third in cash. The stock portion should include European holdings, for that region is coming out of recession and its corporate profits and stock markets will be responding accordingly. However, European equities do carry greater risk. I'd stick with Germany, France and the United Kingdom. Domestically, I don't see a stock market crash, but the big returns are already gone. Stay out of bonds altogether."

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