A blueprint for year-round dividends

THE TICKER

March 02, 1995|By JULIUS WESTHEIMER

After climbing on Tuesday to within one point of its all-time closing high of 4,011.74, the Dow Jones industrial average slipped 16.25 points yesterday to finish at 3,994.80.

Bond prices were little changed, with the 30-year government bond yielding 7.44 percent, compared to its Nov. 19 recent peak yield of 8.16 percent.

FREQUENT CHECKS: Speaking of stocks, would you like a steady stream of dividends throughout the year? Here are "Stocks in Three Dividend Time Slots," from the S&P Outlook, Feb. 22. (Yield percentages in parentheses):

Early Jan., April, July, Oct.: Baltimore Gas & Electric (6.3), New England Electric (6.8), Philip Morris (5.3), Scana (6.4.)

Early Feb., May, Aug., Nov.: Alliance Capital Management (9.1), Carolina Power & Light (6.3), Public Service of Colorado (6.5), U S West (5.5.)

Early March, June, Sept., Dec.: American Brands (5.3), Crown American Realty (10.8), Entergy Corp.(8.2), Wisconsin Energy (5.0.)

An accompanying article explains that by buying just three of these issues (one in each time slot), you would receive 12 dividend checks annually, with income spaced fairly evenly (once a month) throughout the year. The story adds, "All of these stocks have above-average yields, and many will reward long-term holders with periodic dividend increases."

HARD TO BELIEVE: "If from age 20 to age 65 you save $50 a month and get an average annual 8 percent return, at age 65 you can take out $1,658 every month until you reach age 100. While you would have put in a total of $27,000, you would withdraw a whopping $693,300. By comparison, to reach the same goal if you started saving at age 30, you would have to save $112 a month -- more than twice as much." (James Stowers, 20th Century Mutual Funds.)

POSTCARD PATTER: Here are more forecasts from your Dow Jones contest entries: "Because I believe the market will recover in 1995, I'm guessing 4,195 by year-end." (Bud Gray) . . . "I'll say 4,154. Years married, followed by year married." (Alice Evans.)

"My prediction is 3,987, but I hope that's also the low for the year." (Joseph Vangrin) . . . "I'll go with 4,095 because that's my 4-digit lucky lottery number." (Tammy Davis) . . . "I was born in 1927 and wish I were 40 years old, so it's 4,027. I came in third last year." (Mary Jane Meisel.)

HOPEFULLY HELPFUL: "The clock is ticking, but some people have time to trim their 1994 income-tax bill by contributing to an IRA. True, the rules can seem insurmountable, but the rewards of qualifying for an IRA deduction make it worthwhile to take a fresh look. If you can take the full deduction of $2,000, it could trim as much as $792 off your tax bill." (Wall Street Journal.)

Ticker suggestion: See your benefits people or your accountant promptly to see if you qualify.

MARCH WINDS: "In this century, not a single year ending in '5' has been a loser. In fact, market returns in all mid-decade years except one (11 percent in 1965) have exceeded 20 percent." (Kiplinger's Personal Finance magazine, March) . . . "Don't let Mexico's woes deter you from foreign investing. Crises often lead to opportunities." (Money, March) . . . Eastern Savings Bank, Baltimore, is listed under "Top Jumbo ($100,000) Savings Rates" in "100 Highest Yields," reprinted in The New York Times, Sunday, Feb. 26.

BE CAREFUL: Smart Money, March, says that the "Fundamental U.S. Government Strategic Income Fund" showed a loss of 25.5 percent last year. The story explains, "The fund borrowed heavily against assets, and much of the 2.12 percent expense ratio consists of interest payments. The management fee of 0.75 percent is also steep for a bond fund, especially given its dismal track record." Ticker suggestion: Study your government bond (or any other) fund prospectus carefully before you invest.

NOTES & QUOTES: The locally operated USF&G Pacholder Fund is listed under "The Best Closed-End Funds" in Business Week, Feb. 20, with an average annual total return of 12.7 percent for the 1992-1994 period.

T. Rowe Price Tax-Free Short Intermediate Fund (800-638-5660) appears under "The Best Savings Yields in the U.S." The yield is quoted at 4.64 percent, with a "taxable equivalent yield" of 6.44 percent.

If your adjusted gross income is between $20,000 and $25,000, your total federal income tax is 7.8 percent of your AGI, but if your adjusted gross income is between $50,000 and $75,000, the tax is 12.4 percent of AGI. (Data from Internal Revenue Service.)

LAST LINES: "IRS auditors will challenge twice as many tax returns in 1995 as they did last year." (U.S. News & World Report, March 6.)

"For better job hunting, use an on-line computer bulletin board to post your resume, search for openings, talk with other job hunters and make contacts with potential employers. Many employers feel that anyone using a computer bulletin board is already a cut above the rest." (PC magazine.)

Black & Decker stock has appeared in the 12-month "New High" listings several times in recent weeks. Now trading around $26- $27, the stock sold as low as $17 in the last 52 weeks.

Tomorrow night, "Wall Street Week With Louis Rukeyser" is titled "Emerging Values," with guest L. Keith Mullins, managing director of Smith Barney Inc.

"Better to ask twice than lose your way once." (Danish proverb.)

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