Dow industrials up 530 points in '96, but beware of September

The Ticker

August 30, 1996|By Julius Westheimer

DESPITE yesterday's discouraging 64.73 point slide, the Dow Jones industrial average turned in a strong performance this year to date.

With the Dow index standing this morning at 5,647.65, the blue-chip indicator is up 530.53 points, or 10.3 percent, in 1996.

Last year the Dow soared 1,282.68 points, or 33.4 percent.

But looking ahead, darkly, September has historically been the year's worst month as measured by the Dow Jones industrials and the S&P 500-stock index.

But the 1996 "Stock Trader's Almanac" says, "September has seen good markets in several election years, moving up in 1980, 1988 and 1992, and off only a trifle in 1984."

And now where? Take your choice:

GLOOMY SIDE: "Stocks will enter a danger period starting in September, continuing into 1997. A major bear market could start then." (Investment Trends & Strategies.)

"We now have a line in the sand. Once stocks close below their July lows (the Dow Jones was at 5,350), the major trend will be down. We can foresee the Dow in the 3,000s next year." (Ripples in the Wave.)

BRIGHTER SKIES: "Stable earnings growth and falling bond yields are now attractive for stocks." (Argus Weekly Staff Report.)

"For 1996 and 1997, utilities and REITS are the lowest-risk bets. They've had their bear markets, now thoroughly washed out." (Staton Institute Advisory.)

LONGER VIEW: "Peter Lynch says that every few years the market runs a 20 percent 'sale,' but most people are so afraid of 1929 that they sell at the low rather than buy." (Moneypaper, August.)

TICKER SUMMARY: Of the investment letters, advisories and market comments I read recently, about 70 percent are bearish short-term.

LOCAL LINE: Legg Mason's Gerald Scheinker will mail his firm's 70-page "Quarterly Bank Report -- Community Banks" if you phone (410) 486-8010.

"Bethlehem Steel faces stiff challenges, but with operating margins at decade highs and debt 33 percent below 1991, management is making dramatic progress." (Personal Finance, Aug. 28.)

"My favorite is not a stock, but the New Zealand market -- out of favor, but with good prospects." (Johns Hopkins University Professor Steve Hanke in Forbes, Sept. 9.)

GETTING A RAISE (Part 3): "When there are 'absolutely no raises, absolutely no exceptions,' there are exceptions. Make absolutely certain your boss and your boss' boss know how much you handle and how well you handle it. Don't even dream of being modest when describing your performance -- what you accomplished, upgraded, created, uplifted, etc.

"Don't accept that 'later' put-off. As Alice says in 'Through the Looking Glass,' 'It's jam yesterday, jam tomorrow, but no jam today.' " (Cosmopolitan, September.)

BE CAREFUL: "Life insurers sometimes offer the same product with different commissions. The higher the commission to the agent, the worse the deal for the consumer.

"One company sold an annuity paying 7.5 percent and 8 percent to the agent. If that agent talks buyers into the same annuity at 5.5 percent, the commission is 10 percent." (Smart Money.)

COME TO ORDER: Want to make your business meetings more effective? Read a new book, "We've Got to Start Meeting Like This," by Roger Mosvick and Robert Nelson ($14.95).

Highlights: "End sessions as soon as agenda is taken care of. Involve as many people as possible. Restrict leaders to 50 percent of your meeting time. Good preparation a must. Limit staff meetings to one a week."

MONTH-ENDERS: State Fair visitors: Stop by the state comptroller's booth in the Main Exhibition Hall for help locating such things as unclaimed bank accounts, insurance benefits and stock dividends.

Stock and bond markets will be closed Monday, Labor Day.

To determine what percentage of stocks should be in your portfolio, subtract your age from 120. For example, if you're 40, you want 80 percent in stocks; if you're 50, you want 70 percent.

Third-quarter federal and Maryland estimated tax payments must be postmarked by midnight Sept. 16.

Pub Date: 8/30/96

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