What to do if worried about autumn

The Ticker

September 27, 1996|By JULIUS WESTHEIMER

APPROACHING the year's final quarter, we present seasonal suggestions for your money:

AUTUMN ADVICE: "Even if you're frightened, don't abandon stocks. Research shows 10.5 percent annual stock gains vs. 3.7 percent for cash equivalents, arguing against such a rash move. But to protect against a downturn, put some money in high-quality, low-risk investments that yield 6.8 percent and more. Examples: One-year CDs, short-term bond funds." (Money, Oct.)

PRUDENT PATTERN: "Dollar-cost-averaging is prudent in volatile markets because as stocks drop, the same dollars buy more shares. When stocks rise, your additional shares benefit more from price increase. Regarding the above, have money transferred automatically from your bank to a mutual fund every month. Most funds have simple forms for this purpose." (Ibbotson Associates)

COMPUTER CORNER: "Brothers David and Tom Gardner developed an uncanny ability to pick stocks that consistently outperform the market. Online site they created -- The Motley Fool on America Online (Keyword: Motley) -- is one of the most popular investment forums in cyberspace. From 1980-1995, its Investing for Growth strategy earned 26 percent annual return vs. 11.5 percent for S&P 500." (HomePC magazine, Oct., which carries full details.)

WHAT'S AHEAD? "October has a bad reputation, thanks to the 1929 crash, 1987 one-day Dow Jones 508-point plunge and the nearly-200-point 1989 free fall on 'Friday The 13th.'

"Be fair, though: This month has brought an end to eight major bear (sharply down) markets over the past 50 years." (Kiplinger's Magazine, Oct.)

OFFBEAT VIEW: "If I were 25 years old, I'd move into real estate investments. (Michael Milken, in Fortune's Sept. 30 balanced cover story, "Milken's Back -- With Big New Ideas.")

The story adds, "Milken feels that real estate, out of favor during most of the 1990s, is about to become attractive again."

MARYLAND & MORE: Maryland ranks No. 20 under "Tuition's Bite," a government ranking that shows share of income going for public four-year college costs. Our annual tuition is $3,572, "income bite" 9.11 percent. Average: 8.8 percent.

Bell Atlantic, serving our area, appears under "25 Most Popular Stocks," in Money, Oct. "This company will likely exceed analysts' earnings forecasts," the story says.

Procter & Gamble stock, widely held locally, is listed under "Best of the New Nifty 50: Picks of Morgan Stanley," in Kiplinger's Magazine, Oct.

"McCormick Renews Taste for Growth," says Smart Money, Oct., under "Street Smart Contrarian." The story reminds us, "McCormick is the nation's No. 1 spice retailer."

Pub Date: 9/27/96

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