August historically a good month for investors

The Ticker

July 31, 1996|By JULIUS WESTHEIMER

Looking ahead, we open the August Almanac:

"August in Wall Street is historically an 'up' month, rising 0.4 percent on average over past 45 years." (1996 Stock Trader's Almanac)

"Hang onto your stocks in August. Historically, three days before Labor Day are strong ones. Since 1961 the Dow has been up 26 times but down only nine in that period." (Kiplinger's Magazine, August)

CLINTON RALLY? "Since 1941, S&P 500 stock returns in both third and fourth years of presidential terms have averaged double digits, never turned negative.

"But do recent tumbles signal end of bull market? In fourth years of 13 past presidential terms, July was worst month -- by far -- but second half in election years has always been positive." (Business Week, Aug. 5, on newsstands this week)

THINK HIGHER: "Many people think they should buy just enough liability coverage to match their net worth, figuring they can't be sued for more than they own.

"That could be a costly mistake. If you lose a liability case, the amount you'll owe will be based on how seriously the other

person was injured. One horrendous suit could wipe you out." (Money, August)

Ticker suggestion: See your insurance person promptly about your liability coverage.

MONEY-SAVERS: "Call state tourism departments for free maps and money-saving coupons for restaurants, attractions, etc. Make two calls before you rent a car, checking airport and downtown locations for your favorite rental-car company.

"Challenge your property tax bill; three out of four homeowners who fight tax assessments get reductions.

"Shun extended warranties. Salespeople push them on everything, but few customers ever use them. Say no, and you'll save hundreds of dollars." (Money, August, under "50 Ways to Save $50 or More")

TIGHTEN BELT: "Junk [low-quality] bonds pay the highest yields to compensate you for risk they may default. But, thanks to the still buoyant economy, that risk has diminished somewhat -- and so have junk bond yields, even on the low-rated CCC bonds, the most speculative grade." (Business Week, July 22)

WHY PAY MORE? "Leading borrowing deals in Baltimore. Fixed-rate 30 year: Baltimore County Savings (410-256-5000); one-year adjustable: Heritage Savings (410-583-8700); home-equity line: First National Bank of Maryland (410-244-4000); car loan: Baltimore County Savings (410-256-5000)." (Money, August) Check institutions for current rates.

NO FREE LUNCH: "After stylist Martha Stewart invited businessmen and women to her Westport, N.Y., home for lunch -- to negotiate promotion of her Kmart housewares line -- she sent each participant a steep bill for their share of the food costs." (Forbes, July 29)

MONTH-ENDERS: This week's (July 29) Barron's says, "Worried about further market declines, respondents to our 'Big Money Poll' have cut stocks to 66 percent of their portfolios. They're sticking with Intel, Merck, Citicorp, IBM."

"Aug. 15 is deadline to file taxes if you requested an extension. Still not ready? Ask for another two-month extension by sending in Form 2688 -- but this time you must give a reasonable cause and get IRS approval." (Smart Money, August)

"To make a meaningful dent in your tax bill, keep working at tax savings year-round. For example, buy Treasury bills that mature next year, letting you defer tax due on interest income until 1997." (Tax Hotline, August)

LAST, NOT LEAST: Brokers, Note: "Savor one cup of coffee, not a second. Too much caffeine increases anxiety on the job. Try this trick on yourself: Mix some regular coffee with a lot of decaffeinated." (Working Families, August)

"Buying battered stocks is a great way to reduce risk in this uncertain market. Our 'Turnaround Trio' is Flow International, Instron and Pacific Scientific." (Personal Finance Newsletter)

Bell Atlantic, which serves our area, and Washington REIT, our neighbor to the South, are included under "High Yields Without High Risks" in the same newsletter.

"Ask your doctor to give you free samples of new drugs he gets from pharmaceutical companies." (Smart Money, August)

Pub Date: 7/31/96

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