IBM's offer for Lotus opened eyes on Wall St.

THE TICKER

June 06, 1995|By JULIUS WESTHEIMER

The Dow Jones industrial average reached another record high yesterday -- its 34th peak this year -- rising 32.16 points to close at 4,476.55. The Dow opened 1995 at 3,834.44.

As one local broker put it, "When IBM offered to acquire Lotus Development at almost double Lotus' share price, that surprise woke up the entire market."

JUNE 6 JOURNAL: Beginning tomorrow, you must pay for your stock and bond purchases within three business days rather than five. Suggestion: For convenience, leave your securities with your broker in "street name."

On D-Day, Tuesday, June 6, 1944 -- 51 years ago today -- the Dow Jones industrial average closed at 142.21.

Your second-quarter federal and Maryland income tax payments are due next week -- Thursday, June 15.

HOPEFULLY HELPFUL: "If you participate in a 401(k) plan and finish making the $9,240 allowable maximum contribution before year-end, put the extra income in a tax-deferred IRA." (Jonathan Pond, financial planner)

"Always have money in the bank equal to six months' salary in case of serious injury, illness or unemployment." (Carol Keeffe, author of "Get What You Want in Life With the Money You Already Have," $10.95)

Locally, Bethlehem Steel appears under "Laggard Stocks We Like" in S&P Outlook, May 24. Bethlehem's earnings are predicted to rise from 35 cents a share this year to $2.10 in 1996.

LOSER'S GAME: "Market-timing newsletters have bad timing. A recent study of 237 newsletters' recommendations found that 75 percent underperformed a buy-and-hold strategy, based on the S&P 500-stock index. If a newsletter beat the market two years in a row, it had less than a 50 percent chance of doing it a third time." (University of Utah study)

CAREER CORNER: "In this time of uncertain job futures, an advantage of 401(k) plans is that you can take them with you. When you change jobs, move your funds to your new employer's 401(k) plan, but be sure to make a 'trustee-to-trustee' transfer to avoid tax penalties. Leave your money at your old job until retirement if you like its investment choices or if your new firm won't accept your plan." (Business Week, June 5)

TAX TIP: "Keep careful records of the 'tax basis' cost of stocks, mutual funds and other investments. Identify the specific shares to be sold by written instruction to your broker or fund. Reason: If you decide to sell some of your holdings, knowing your cost basis of specific shares will enable you to pick particular shares to sell for maximum tax benefit." (Tax Hotline, May)

FAX FACTS: "Fax long-distance instead of calling, to relay a message without expensive and time-consuming small talk. Send faxes late at night when phone rates are lowest. Faxing a short letter long-distance is faster and cheaper than mail. And faxing local letters is the best bargain of all -- local phone calls are usually free, saving 32 cents per letter." ("Cheap Tricks" by Andy Dappen, $15)

EXECUTIVE SUITE: "It is a myth that the stressful life of business executives causes cardiovascular problems. Actually, hypertension and heart attacks are more common among people with lower educational and income levels. But it's no myth that smoking doubles the risk of a heart attack." (Harvard Heart Letter, June)

NOTES & QUOTES: A new book, "Personal Finance For Dummies" by Eric Tyson ($16.95) is a light-hearted primer about managing money.

"A family budget is a process of checks and balances. The checks wipe out the balances." (June 6 "Thought for Today" in my 1995 pocket calendar.)

Under "A Portfolio For Getting a Head Start on College Bills" in the "1995 Money Guide" ($5.95), we find these allocations: Large-capitalization stocks, 35 percent; small-caps, 15 percent; foreign stocks and funds, 20 percent; intermediate-term bonds, 5 percent; short-term bonds, 25 percent.

"This long bull market has promoted unreasonable reliance on its continuity. Beware." (A. Gary Shilling, economic consultant)

"What You Should Know About Your IRA" is a worthwhile, free book available by writing to Mutual Fund Education Alliance, Attn: IRA Brochure, 1900 Erie St., Suite 120, Kansas City, Mo. 64116.

LAST LINES: "Fender Bender Guide" is a handybooklet that fits into your glove compartment, tells what to do in case of an accident and includes a checklist of items to take care of at the scene. Send $2.85 to Ameritron Co., 3361 S. 4800 West, West Valley, Utah 84120.

"Seeking an investment that will let you sleep at night? Look no further than zero-coupon bonds. See your broker for details." (Entrepreneur, June) Legg Mason's Gerald Scheinker will send you his firm's latest "Real Estate Investment Trust Buy List" if you phone 486-8010.

American Home Products, Avon, Mobil, Philip Morris, Warner Lambert and Xerox are included under "Candidates For Stock Splits" in S&P Outlook, May 31.

"Never take a problem to your boss without taking possible solutions and, when you figure out a solution, spend five minutes figuring out how to communicate it." ("Never Confuse a Memo With Reality and Other Business Lessons" by Richard Moran, $6)

"The market is fundamentally sound, with earnings exceeding expectations. While we may face short-term resistance above DJ 4,400, the big picture is still very bullish." (The Daily Trader)

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