With thanks for stocks that rose and courage by many investors

The Ticker

November 26, 1997|By JULIUS WESTHEIMER

THIS Thanksgiving we can be thankful for:

A RAGING BULL: In 1997, the 15-year bull market -- which substantially boosted values of 401(k)s, 403(b)s, mutual funds and personal accounts -- continued its surge, with the Dow Jones industrial average rising from 6,448.27 Jan. 1 to this morning's level of 7,808.95. This astonishing bull market began Aug. 12, 1982, with the Dow average at 776.92. The Dow has soared about 900 percent since then.

QUICK RECOVERY: Thanks to strong buying support at lower levels and nonpanicky selling by long-term investors, Wall Street recovered rapidly from "Bloody Monday," Oct. 27, when the Dow plunged 554.26 points, its largest one-day point setback in history. Within 3 1/2 weeks, the Dow recovered all of its loss, and more.

BETTER DEAL: We are thankful for an improved IRA called the "Roth IRA," available starting next year. Although the Roth IRA is nondeductible, account holders may withdraw money tax-free under many conditions. You may convert your present IRA into a Roth IRA.

FULL PLATE: We can also be grateful for a strong economy, a minuscule inflation rate, relatively low interest rates and the new tax law, which cuts the top tax rate on long-term (18 months, up from 12 months) capital gains to 20 percent from 28 percent.

LOOKING BACK: Rummaging through old newspapers, I found a yellowed copy of The Sun (7 cents) from Thanksgiving week in 1963, with these prices: Read's drugstores, Baltimore, "Thanksgiving dinner with turkey, West Virginia baked ham, vegetables and dessert, $1.00"; and new Cadillac with "full luxury equipment," $5,537; York Road car wash, $1; Brooks Bros. oxford shirt, $7 ($48 today). The Dow Jones average stood then at 732.65.

LOOKING AHEAD: Under the new law, people under age 59 1/2 may take up to $10,000 from an IRA without the 10 percent "early withdrawal" penalty, if the money is applied toward the purchase of a first home.

Starting in 1998, you can pay your taxes by "commercially acceptable means," such as credit cards.

The new tax law creates a new type of IRA, to be used by those saving for a child's education. Beginning in 1998, annual nondeductible contributions up to $500 per year per beneficiary may be made.

People who sell their homes after living in them less than two years will be allowed a partial tax break on profits if the sale is because of a job change, health reasons or unforeseen circumstances.

LOCAL THANKS: Let's be thankful that Maryland continues to receive triple-A ratings on its tax-free bonds. It's the highest ranking awarded by major rating agencies.

Pub Date: 11/26/97

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