Real estate investment trusts attract attention

The Ticker

June 09, 1994|By Julius Westheimer

Stocks rode a roller-coaster all day yesterday, with the Dow Jones industrial average closing with a minor loss. The blue-chip indicator slipped 6.46 points, finishing at 3,749.45. Technology stocks were especially weak after reports of lower earnings.

JUNE JOURNAL: "Given the sharp ups and downs of real estate investment trusts over the past two decades, it seems incongruous to mention them in the same breath as conservative utility stocks. But with higher interest rates, regulatory problems and competition threatening utilities' generous dividends, investors are increasingly turning to high-yielding equity real estate investment trusts, otherwise known as REITS." (Business Week, June 6). . . "Value stocks or growth stocks? A recent study weighs the evidence in great detail and concludes that the value strategy wins hands down." (Business Week, June 13) . . . Here are year-to-date percentage "total return" figures: International funds, plus 1.2; money market funds, plus 0.9; growth and income funds, minus 1.2; aggressive growth funds, minus 4.1; government bond funds, minus 4.2; Ginnie Mae funds, minus 4.1. (Data from USA Today)

NOTES & QUOTES: "After a stock split announcement, a stock's price usually rises, but then drifts back or falls after the split. If you're not planning to hold the stock for the long haul, sell right after the split is announced to take advantage of the price rise." (Robert Stovall, investment adviser) . . . "When your employer gives you a raise, give your retirement savings a raise too. Increasing the amount you invest regularly can give your investments a chance to stay ahead of inflation." ("Retirement Planning With the Investor Advantage" newsletter.)

LOCAL HONOR ROLL: Black & Decker is written up at length in Business Week's June 6 cover story, "Annual Winners: The Best Product Designs of the Year." The locally based giant toolmaker won the award for its Powershot Heavy Duty Staple Gun. The story says, in part, "With a retail price of $20 to $25, the Powershot has moved fast in a $100 million-a year-market. For B&D, another plus is that the device is fairly easy to manufacture."

BALTIMORE BEAT: Legg Mason's new "Investor's Dozen" includes Ameron, Circuit City, Figgie International, Food Lion, Harcourt General, HUBCO, Instrument Systems, MCI Communications, NWNL Companies, Octel Communications, Rhodes and Shawmut National . . . The manager of the Pikesville Crown service station told me that only one half of 1 percent of customers now use "Full Serve" pumps vs. 20 percent 10 years ago . . . Good news for Sparrows Point: Bethlehem Steel is listed in Forbes, June 20, under "Prosperity Is Around the Corner, with the subhead, "If Wall Street analysts are right, these corporations will return to profitability this year." . . . Leeds Federal and NationsBank stocks reached 12-month highs recently.

BITS & PIECES: Here are the "Dow 5" stocks at midweek: American Express, Eastman Kodak, Merck, Philip Morris and Woolworth. The strategy's performance quintupled the Dow Jones average over 20 years and produced an annual 21 percent return. Your broker has details . . . "When you reserve a rental car, don't accept the quoted price until you understand what it does and doesn't include. Some companies charge extra for fuel, airport surcharges, additional driver fees and mileage above the basic limit." (Dollar Stretching Ideas) . . . "There's better news ahead for people looking for temporary jobs this summer. It's looking like the best summer for jobs in five years, especially for young people, 16 to 24." (Sharon Canter, Manpower.)

WORKPLACE WISDOM: "Should you borrow against your retirement savings? If you're in an employer's 401(k) plan, you can borrow half of your account value -- up to $50,000 -- without incurring taxes. It's easy; nobody checks your credit and you pay interest only to yourself. The drawback is that you may end up with less money at retirement because the interest you pay yourself may be less than the earnings had you left the money in the account." (Neal J. Solomon, financial planner.)

HOPEFULLY HELPFUL: "If you can't stand to lose money even briefly, two terrific places to park your cash are 5- to 7-year U.S. Treasury bonds and money market funds." (Money, June) . . . "Before you decide whether to keep or sell a stock or mutual fund, consider why you bought it in the first place. If you bought a firm's shares because they were cheap, a sharp rise in the stock's price might be enough to lead you to jettison them. When you make an investment, you have certain expectations. When those reasons no longer apply, it's time to consider selling." (Clint Willis, columnist, in Working Woman, June.)

WALL ST.: "The thick gloom in the stock market looks like a positive to me." (R.S. Salomon Jr., in Forbes, June 6) . . . "Municipal bond funds are attractive, especially those with intermediate maturities." (William Waters, Merrill Lynch) . . . "Stocks look appealing today because we've seen the worst in interest rates. "There's a developing bear market in stocks and bonds and a developing bull market in gold." (LaLoggia's Special Situation Report)

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