Tips on making money, keeping it, from the Dow 5 to the dessert cart

The Ticker

January 19, 1996|By JULIUS WESTHEIMER

LESS THAN one-third of the way through winter -- can that be possible? -- we look both ways:

LOOKING BACK: "Congress is heading toward months of bitter rough-and-tumble politicking and as little legislating before election as it can get away with." (Forbes -- note the date -- Jan. 15, 1946.)

LOOKING AHEAD: "As 1996 begins, monetary environment favorable but stocks overvalued on fundamentals. Near-term outlook is uncertain." (Mutual Fund Forecaster, Jan. 5)

LIGHTER SIDE: Speaking of uncertain outlooks, I saw a note clipped to a New York restaurant menu: "Life is uncertain; eat your dessert first."

SURPRISE! "Income investors did better in stocks than bonds. In 1975, 30-year Treasury bonds paid 8.2 percent vs. S&P 500 stocks' 4.4 percent dividends. But by 1995, dividends on stocks climbed to 16 percent -- that's no misprint -- on your original investment, twice the return on bonds.

"Bonus: Stocks soared sevenfold over 20 years." (Smart Money, Jan.)

ERRORS TO AVOID: "Major investing mistakes: Buying too many or too few stocks (20 is about right). Taking profits too soon. Failure to take losses promptly. Buying stocks on a 'tip' rather than on merits. Failing to follow a disciplined approach." (Entrepreneur, Jan.)

CONTEST UPDATE: Postcards are pouring in for our annual Dow Jones forecasting contest. We will repeat complete rules Wednesday. The deadline is just over one week away -- Jan. 28.

MARYLAND MEMOS: USF&G appears on Legg Mason's January list of "Recommended Stocks."

LaLoggia's Special Situation Report (Jan. 10) says, "Giant Food, a chain of 160 supermarkets in the Baltimore-Washington area, is a leading takeover candidate."

"High-tech stocks had at least one brief 10-20 percent drop a year over 11 years," says Charles Morris of T. Rowe Price Science & Technology Fund. (Fortune, Jan. 15, in "Why High Tech Mania Should Survive Latest Jolt.")

HOPEFULLY HELPFUL: "Want a copy of your credit report? TRW, a credit-reporting agency, will give you one free report a year. Call 800-682-7654." (Consumer Reports, Jan.)

The latest Kiplinger Washington Letter says there's no chance for a flat tax in the next several years. Too much opposition from home builders and charities.

DOW 5 UPDATE: As of mid-week, the "Dow 5" stocks were Caterpillar, Chevron, General Electric, International Paper and Minnesota Mining and Manufacturing. New calculations show that since 1973, a $10,000 investment would have returned $810,150, or 20.6 percent per year.

THIS YEAR'S BEST: Here are "Hottest Businesses in 1996," from Entrepreneur Magazine: Internet consulting, bakery-cafes, home health care, soft pretzels, specialized staffing, family entertainment centers, computer training, children's educational toy stores, exporting, computer consulting, day spas and bagel shops.

JANUARY JOURNAL: "Even if you eventually roll your money into a new employer's 401(k), the best immediate move is to transfer money to an IRA." (Kiplinger's Personal Finance Magazine, Feb., in "What To Do if the Ax Falls.")

"If 1996 runs true to form as last year of a presidential term, stocks will give 10-15 percent return." (Worth 1996 Investing Guide.)

"Making gifts to children won't get you a tax deduction, but it gives you a warm feeling and will reduce your estate taxes." (Tightwad Gazette.)

"Schedule morning job interviews. Surveys show 83 percent of hiring executives look more favorably on job-seekers before lunch." ("Get The Job You Want in 30 Days," by Gary Grappo, $10.)

New deadline: Your fourth-quarter estimated tax returns must be postmarked by midnight Monday, Jan. 22.

Tonight, "Wall Street Week" examines the future of stock exchanges with NYSE CEO Richard Grasso and panelists Alan Bond, Martin Zweig, Michael Holland.

This week's National Business Employment Weekly runs a helpful story, "Are You Prepared to Find a New Position?" that contains specific questions and answers.

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