The day before the Federal Open Market Committee meets to discuss interest rates, Wall Street moved with little conviction in light trading. The Dow industrials ended the up-and-down day down 8.42 points, at 3,760.29.
SAFE OR SORRY? Speaking of stocks and bonds, how do you find a reliable investment person? Money magazine, August, runs a good story, "How To Find A Stock Broker You Can Really Trust." Excerpts: "It's easier to check out a broker before you invest than to try to get your money back . . . By asking a few sharp questions, you can spot a broker who is not only honest, but right for you. Sample questions: How long have you been in the business? What type of clients do you specialize in? How often will we talk in person and review my portfolio? How quickly will you return my phone calls? How well have your clients' portfolios performed? Can I see some sample performance records, with your customers' names blacked out? How much will you make from my investments? Don't you want to know more about me -- my risk tolerance, what I already own, investment goals, etc.?" The entire article is worth reading.
YOU KEEP MORE: "Looking for a higher-yielding alternative to CDs and money market funds? Check out good old-fashioned Series EE savings bonds, once only favorite gifts of older relatives for births, bar mitzvahs, etc., and traditionally shunned by more sophisticated investors. But they deserve another look. Series EE savings bonds are now guaranteed to pay a minimum of 4 percent annually if held for six months, compared with average money market and CD yields below that level. And if you use the bonds to pay college fees for yourself or your child, interest may be free of federal taxes, depending on your income. Your bank has further details." (Working Woman, August)
MONEY-SAVER: "When you reach age 70 1/2 , you have to start drawing down your IRA. But what if you don't need the money? Answer: Don't take out more than you have to. This will minimize your tax bill and allow your money to grow tax-deferred. And if you're single or or if your spouse won't need the IRA money, name a son or daughter as a beneficiary. This strategy prolongs the tax-deferred money growth even longer." (Kiplinger's Personal Finance, August)
TAKE YOUR CHOICE: "John Kenneth Galbraith, 85, thinks that the best way to promote economic growth is through extensive government activity in economic affairs, mainly through federal spending and the creation of budget deficits." (Wall Street Journal in a review of Mr. Galbraith's latest book, A Journey Through Economic Time. . . . "The main trouble with this country, especially in health-care matters, is that the government meddles in people's private affairs too much." (Rush Limbaugh)
WORKPLACE WISDOM: "When offered a job, consider all of the elements -- not just title, salary and responsibility. Decide if you will fit in. If the boss is younger, make sure you'll be comfortable. In a small firm, will you be happy without large staff? In a large one, will you feel stifled? Suggestion: Because once offered a job, people tend not to ask questions that might lead them to turn it down, you'll find it is better to ask before starting than to take a job that proves to be a bad fit." (Emily Koltnow, co-author, "Congratulations! You've Been Fired!")
MID-MONTH MEMOS: "Before buying an obscure mutual fund -- one that you never heard of -- insist that the fund give you its Form ADV, an SEC filing that profiles the fund's investment advisers. If any have suspicious employment histories, get a background check from the National Association of Securities Dealers at (800) 289-9999 or from your state securities commissioner." (Forbes, Aug. 15) . . . A 1 percent increase in interest rates will reduce the market value of a five-year bond by 4.25 percent, a 10-year bond by 7.13 percent, a 30-year bond by 11.58 percent. These changes affect you only if you sell the bonds before maturity. If you hold the bonds until maturity, you will receive their full face value." ("Straight Talk About Your Money" by Ken and Daria Dolan.)
COCKEYSVILLE COMMENT: Several readers who work at Noxell, the locally based cosmetic giant that was taken over by Procter & Gamble, have asked for opinions on P&G stock. Here, from a recent S&P Outlook, are a few quotations: "Procter & Gamble is an issue from our Master List of Recommended Core Stocks For Superior Long-Term Capital Appreciation. This leading consumer products company is benefiting from cost-cutting and increased manufacturing efficiency. These shares (quality ranking A-) are attractively valued at 16 times estimated 1995 profits. They offer an excellent way to invest in the rapidly growing global consumer marketplace."
HARD TIMES: From an "Annual Earnings List, 1932-1934," from Time-Life Books, sent in by a reader: Waitress $520, typist $620, steel worker $422, registered nurse $936, priest $831, lawyer $4,218, hired farmhand $216, engineer $2,520, dressmaker $780, construction worker $907, bus driver $1,373, airline stewardess $1,500, airline pilot $8,000, bus driver $1,373, electrical worker $1,559, live-in maid $260, pharmaceutical salesman $1,500 and stenographer-bookkeeper $936.