Remain calm, Business Week advises investors

The Ticker

June 14, 1996|By JULIUS WESTHEIMER

HERE ARE SOME highlights from Business Week's June 17 cover story, "The World's Best Investments":

"Tune out the noise. Remember that many gurus now advising you to exit the market said the same thing last year when Dow Jones average was 1,200 points, or about 25 percent, below today's level. Granted, stocks aren't a screaming buy, but still offer some of the world's best opportunities.

"Above-average growth sectors are technology, natural resources, emerging markets.

"Top picks include Cisco Systems, LSI Logic, Oracle, Barrick Gold, Freeport-McMoRan, Schlumberger and Woodside Petroleum.

"Investors will be tested in the second half, but those who stay calm will be well-rewarded for their fortitude."

MARYLAND MEMOS: BGE stock is under "25 Stocks With Above-Average Yields and High Rankings" in a recent S&P Outlook. It yields 6 percent.

HANG IN THERE: "You make lots of money investing in quality businesses you understand -- then holding on. Example: Investors who bought 100 shares of Heinz for $4,100 in 1946, reinvesting dividends, now hold 41,960 shares worth $1,511,147." (Moneypaper, June.)

LIGHTER SIDE: "No stock is completely worthless. You can always use it as a horrible example. Money doesn't care who makes it. The value of making a mistake is that you recognize it when you make it all over again." (Paul Miller, Wharton School of Finance.)

DON'T FORGET DAD! For Father's Day, books suggested by Bibelot's, Pikesville: "Cyber Investing" by David Brown, $24.95 "The Wealthy Barber" by David Chilton, paperback $12.95 "The Wall Street Money Machine" by Wade Cook, $24.95.

CHECKING UP: "What Your State Tells You About Your Broker," in Kiplinger's Magazine, July, lists for Maryland: Division of Securities, 200 St. Paul Place, Baltimore 21202. Phone 410-576-6494.

"Use address and phone to obtain employment and disciplinary report on a broker. There is usually a nominal charge. You'll also find unresolved complaints, arbitration cases, criminal charges, etc."

GOOD NEIGHBOR: "Washington Real Estate Investment Trust remains the Washington area's leading REIT. That's a good position given the area's above average growth and low unemployment rate." (Personal Finance.)

ALERT: "Too many 401(k) participants mismanage their funds. Mistakes: Not contributing the maximum... Failing to diversify Churning your account... Compulsive 'one-shot' investing... Borrowing from your 401(k)." (U.S. News & World Report, June 10.)

TICKER SUGGESTION: At midyear, review your IRA. Subtract your age from 100, making sure the resulting number becomes the minimum percentage of stocks and stock funds in your account. If you're 30, for example, have at least 70 percent in stocks.

JUNE JOURNAL: "It's surprising how many people ride to Wall Street in a Mercedes to get information from people who take the subway." (Overheard somewhere.)

"Master limited partnerships, hot in the late 1980s, are out of favor now, so may offer good buys. They pay out big distributions, often partially tax-sheltered. See your broker." (Smart Money, June.)

My secretary reminds me that not too many years ago breakfast cereal sold for about $1.50 a box, now "reduced" 19 percent from more than $4.

"Would you buy bonds from a deadbeat who stiffed investors out $800 million 18 months ago? Wall Streeters jumped at the chance, snapping up $875 million Orange County IOUs." (Time, June 17.)

Kiplinger Letter says the hardest-to-fill jobs today are machinists, construction workers, systems analysts, welders and truck drivers.

"The price of a stock varies in inverse proportion to the thickness of its research file." (Stock Trader's Almanac.)

"If a person can see both sides of a problem, you know none of his or her money is tied up in it." (Verda Ross.)

Pub Date: 6/14/96

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