Some advice on how to invest now

The Ticker

March 07, 1997|By Julius Westheimer

WANT SOLID guidelines for this high stock market? Here are suggestions from "A Lesson in Investing," in Moneypaper, March:

"Write down the reason you bought the stock. If the reason is no longer valid, sell. Remember that the media are always bullish on stocks at the top, bearish at the bottom. Dollar-cost average; it's a great way to build your holdings. Also, you benefit from market down-moves."

Speaking of investing, here's positive news about real estate trusts, or REITs: In five of the last six years, REITs produced a greater total return -- gain plus income -- than the Standard & Poor's 500-stock index. Over the last decade, REITS generated a greater average yield than Treasury bonds. Attractive local REITs are Mid-Atlantic Realty, First Washington Real Estate Investment Trust and Saul Centers.

Regarding local stocks, Baltimore Gas and Electric Co. appears under "Electric Utilities: Groups That Hold Up Best in Corrections," in S&P Outlook, Feb. 26.

After six announced splits of well-known companies' stocks this year -- Boeing, DuPont, Exxon, IBM, Intel and Philip Morris -- several readers ask how previously "split" shares performed.

Of the 14 companies in the S&P 100 index that had splits last year, nine easily outperformed the index after the announcement.

Should you buy before or after a split? Because commissions are based on the number of shares transacted, you save money buying before the split. And remember that, although a stock split makes you feel richer, you gain no additional value, just more paper.

Rising dividends are more valuable than splits. Money magazine, March, has a good story entitled, "Buying Stocks That Offer Rapidly Rising Dividends Can Earn You 10 Percent and Up." The stocks listed are C. R. Bard, Eaton, PPG Industries, General Dynamics, Rohm & Haas, Weis Markets, Winn-Dixie, Brown-Forman, Genuine Parts and TRW.

Is joint ownership of stocks wise? The local accounting firm Gross, Mendelsohn, P.A. writes: "When you get married, you're inclined to share ownership of everything with your spouse, with right of survivorship. The catch is this: If you leave everything to your spouse, you waste the $600,000 federal estate-tax exemption."

For a worthwhile free booklet, "Taking a Fiscal Inventory: How to Put Your Financial House in Order," send a self-addressed, stamped, business-size envelope to the Institute of Certified Financial Planners, 3801 E. Florida Ave., Suite 708, Denver, Colo. 80210.

Pub Date: 3/07/97

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