Wall Street's buying frenzy gathered more momentum yesterday as the Dow Jones industrial average surged 44.27 points to close at 4,373.15, its 25th record high this year. At the closing bell the Dow indicator stood 539 points, or 14 percent, above its Jan. 1 level.
Yesterday's "soft landing" reports-- weak auto sales, slow housing starts, sluggish retail business -- also pushed the S&P 500 stock index to a record. Interest rates declined sharply.
WHAT TO DO NOW: "The buy-and-hold strategy has proved the best time and again. Many experts expect a small market downturn this summer to 'correct' some inflated prices, but they lTC still advise 'staying the course.' When you add up commissions and taxes, then match that against a mild 3-5 percent pullback, it doesn't make sense to trade in and out." (Jack Fisher, money manager, in a Business Week, May 8, story, "Got the Urge To Take Some Profits?")
BEST RETURNS: According to PaineWebber's newsletter, "Do You Know How To Reach Your Investment Goals?" and subtitled, "Stocks Provided the Highest Returns," here are the highest percentage returns from 1925 to 1993, with annualized rates of return following each category. Small stocks, 12.4 percent; large stocks, 10.3; long-term corporate bonds, 5.6; long-term government bonds, 5.0; Treasury bills, 3.7, and the inflation rate averaged 3.1 percent. (For the complete letter, phone Marvin Fribush at 576-3220.)
TAX TIPS: Smart Money, May, runs a helpful story, "Five Ways To Make April, 1996, Easier To Swallow." Excerpts: "(1) Hire your spouse; he or she can work elsewhere, but if your spouse performs actual services for you and receives a nominal salary, you can deduct 100 percent of your family's medical costs. (2) Increase your withholding exemption by filing a new Form W-4 with your employer. (3) Don't wait to retire. (4) Use younger baby-sitters. (5) Take a vacation." See your accountant, especially on (3), (4) and (5) for details.
CAREER CORNER: "The ability to speak well in public is the most important skill any political or business leader can have." ("The American Speaker: Your Guide to Successful Speaking," by Avam Bakshian.)
"To get more money from your boss, know your worth, think like a CEO, play up to the boss, ask for more money, leverage your skills, i.e., take advantage of every training opportunity that attracts you." (Money magazine, Jan., in an encouraging story, "What You Need To Do To Get More Money From Your Boss.") Most libraries have copies.
"Avoid the seven deadly sins of resumes," advises U.S. News & World Report, May 8, listing the "sins" as: Making it too long, giving too much history, failing to back up your worth, not listing your accomplishments, bad organization and format, outright lying, lack of care and quality.
BALTIMORE & BEYOND: "F&E Resource Technology Systems, Baltimore, Md.," is listed No. 67 under "The Fastest-Growing INC 100 Small Public Companies," in INC magazine, May. The firm "develops recycling products," according to the listing.
Tomorrow night, "Wall Street Week With Louis Rukeyser" spotlights tax-free municipal bonds, with guest Joseph P. Deane, tax exempt manager, Smith Barney, with panelists Mary Farrell, Monte Gordon and Robert Stovall.
"The stock market skyrocket from Dow Jones 3,000 to 4,000 was the quickest 1,000-point surge in history." (Moneyline, CNN.)
"A foolish mistake too many people make is to ignore or minimize inflation in their retirement planning. The cost of living will rise about 4-6 percent a year." (Kamanitz, Uhlfelder Permission spring newsletter.) Phone 484-8700 for your free copy.
MAY FLOWERS: Most retirement specialists urge people to check their Social Security records -- and receive estimates of their retirement benefits -- at least once every three years, by phoning 800-772-1213.
"Well-known companies now offering dividend reinvestment plans include AT&T, H&R Block, Bristol-Myers Squibb, Browning Ferris, Exxon, McDonald's, Motorola, PepsiCo, Procter & Gamble and Walgreen." (Financial World, May 9, in a story titled, "New Rules Make Dividend Reinvestment Plans Even More Enticing.")
"At Larry's Shoes, Dallas, nice ness to customers pays off. The salespeople work on a 7 percent commission, but if a customer returns within a year, the original salesperson earns 10 percent on subsequent sales to that customer." (INC, May)
The Kiplinger Washington Letter says that the government will try to sell the last $24 billion of failed S&L assets by Dec. 31. For more information about the assets to be sold, call 800-RTC-3006.
Interested in a "reverse mortgage," now that shopping those mortgages is easier due to new rules requiring lenders to disclose the total annual loan cost? Send for "Your Retirement Nest Egg: A Consumer's Guide to the New Reverse Mortgages." The $29.95 price includes shipping from NCHEC Press, Room 115, 7373 145th St. West, Apple Valley, MN, 55124.
"When investing, be patient; this is critical. Over the short term, market sentiment usually rules -- but over the long term, fundamentals usually win out. Patience is one of the most important investment traits, but also one of the toughest to find." (Dick Davis Digest.)