The bear often awakens after elections

The Ticker

November 08, 1996|By Julius Westheimer

MONEY MATTERS to consider over the weekend:

LOOKING BACK: "One historical fact to keep in mind: In seven of the past nine presidential elections, a bear market started within 18 months after the inauguration.

"Some bears -- 1962, 1966, 1987, 1990 -- were delayed 12-18 months, but the two worst bear markets started within two months after the 1968 and 1972 elections." (InvesTech Market Analyst.)

WARNING: "The risk in owning government bond funds is not in the bonds' credit rating, but rather what happens to interest rates, or 'market risk.' As interest rates rise, bond prices plunge." (Business Week, Nov. 11.)

DON'T RUSH IN: "The new government inflation-indexed bonds aren't as ideal for college or retirement as they seem. Although they guarantee inflation protection, tuition and health-care costs have risen much faster than the cost of living.

"Better: A mix of stocks and stock mutual funds, which produce strong results over time." (Irwin Kellner, economist.)

CHECK IT OUT: "Variable annuity sales have skyrocketed over the past several years, fueled by that phenomenon -- baby boomers.

"A variable annuity is a tax-deferred retirement investment that offers mutual fund-type investment options and life insurance protection. Baby boomers use variable annuities to grow their retirement assets and derive tax-deferral benefits." (Research, September.)

TAX TIP: "There's good news in the recent 'simplified pensions' enactment by Congress, for moonlighters and self-employed people. You may be able to increase the amount of income you can put aside tax-deferred." (Forbes, Nov. 4.)

NOVEL IDEA: "A waiter, waitress or salesperson who gives exceptional service may make a valuable sales rep. Give the person your card, describe your company and, if the person responds positively, set up a meeting to explore employment." (Robert Kahn, editor, Retailing Today.)

CRUNCHING LEAVES: "Because Procter & Gamble reduced its coupon costs by 50 percent since 1991, P&G's prices have dropped 6 percent, while the Consumer Price Index rose about 12 percent." (Tightwad Gazette.)

"A lot of people ask, 'Can I make money in the stock market in three months?' If you don't have a time horizon of two to five years, you're going to miss big gains." (Black Enterprise, November.)

Pub Date: 11/08/96

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