If you try to time the market, you may be left on the sidelines

The Ticker

March 28, 1997|By Julius Westheimer

With one trading day to go in the first quarter, the Dow Jones industrial average this morning is at 6,740.59 -- down 140.11 points yesterday, but up 292.32 points, or 4.5 percent, since New Year's Day.

Since Jan. 1, 1995, the Dow is up 2,905.71 points, or 75.7 percent. There has not been a 10 percent correction since 1991.

Looking ahead:

EXPERTS' VIEWS: "The Dow could reach 10,000 by the year 2000." (Martin Sosnoff in Forbes, March 24.)

"The Dow could fall below 5,500 this year before bouncing back." (Michael Sivy in Money, April.)

"The bull market ended on March 11. The Dow may reach 7,000 before beginning to destruct in earnest." (Sid Klein's Daily Fax in Barron's, March 24.)

"This bull market will end, as every bull market eventually ends. Stocks are largely overvalued." (Joseph Nocera, senior editor, Fortune.)

READERS' THOUGHTS: "By the year 2000, the Dow will be close to 15,000." (William Sonderman, Freeland.)

"With another year of a Republican Congress, the public will finally realize we're in a deep depression. Year-end Dow: 3,993." (Harry Bennett Jr., Baltimore.)

"I'm 8 years old. I say Dow Jones 8,000 by year-end. Hope it goes higher." (Jenny Martin, Catonsville.)

"I predict a 2,900 Dow for Dec. 31, 1997." (Arnold Christie, Perry Hall.)

"Greed will push the Dow Jones average up to year-end 7,542." (John Hundley, Baltimore.)

OUR ADVICE: Regarding the above extremes, don't try "market timing," a loser's game. Did you realize that 51 percent of the stock market's gain in the last 10 years took place in only 10 of 120 months? With bad "timing," you could have missed more than half the Dow's 4,553-point, 240 percent gain in the 10 years that ended Dec. 31.

LOCAL LUMINARIES: Bethesda-based Lockheed Martin appears under "Growth Star Stocks" in S&P Outlook, March 19. ("Undervalued defense behemoth gained huge competitive cost advantage from cost reductions.")

Black & Decker is listed in "Five Stocks Ready To Return at Least 20 Percent" in Money, March. "B&D is among stocks 19 percent below two-year highs. They should rebound strongly in the next 12 months," the magazine says.

GET THAT DEGREE: "After a slowdown in the early 1990s, demand for MBAs is soaring. One MBA university career director says, "This is absolutely the best MBA recruitment year I've ever seen." (U.S. News & World Report, March 10.)

BIG BENEFIT: Judging from my phone calls, many people are still unaware that recent changes in the tax law mean that an IRA may now provide even more benefits. For faster growth, married couples can contribute up to $4,000 a year, beginning this year -- not $2,250 any more -- even if only one spouse is employed.

MARCH WINDS: March is typically an "up" Wall Street month, gaining an average of 1 percent over the past 46 years.

Our federal and Maryland 1996 final income taxes are due in 2 1/2 weeks.

TAX TIP: If you overpaid for 1996, consider having less federal tax withheld. Fill out a new Form W-4 from your employer.

Pub Date: 3/28/97

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