It's never too early to invest

The Ticker

March 27, 1998|By Julius Westheimer

HERE ARE some tips to make your financial life a little better:

ACORNS TO OAKS: "Begin at birth! If you invest $1,000 at 6 percent when your child is born, at age 65 the $1,000 will be worth $44,145. If you wait till the child is 16, your $1,000 will grow to only $17,378. If you stall till the child reaches 40, you will have a tiny $4,292." ("Taking Control of Your Financial Life.")

SMALL IS BEAUTIFUL: If in 1940 you invested $1,000 in S&P 500 index companies, you would now have $1,007,909. But if you invested $1,000 in the stocks of an index of smaller companies, you would now have $5,992,190, says the American Association of Individual Investors newsletter.

TAX TIP: "If you are an active online trader, you can deduct some or all of your portfolio-tracking software and Internet-access fees, plus depreciation of your computer. To make a case for deduction, keep a log of your investment and personal use of the computer." (Kiplinger's Personal Finance Adviser.)

BE CAREFUL: "Be sure to make your tax checks to "Internal Revenue Service" spelled out in full, not just to IRS -- so checks can't be easily altered to someone else's name by a larcenous clerk." (Bottom Line.)

GET YOUR SHARE: "To get the most from your retirement plan, read the prospectus carefully and make a list of terms you do not understand.

Once a year, request an individual benefit statement from your pension plan. Pay attention to the formula used to compute your benefits.

Make an appointment with the plan administrator in your human resources department to discuss questions you have." ("Retire With Money," Good Housekeeping, April.)

BONDS VS. STOCKS: "The most fundamental aspect of bonds is their 'real' yield -- the bond yield minus the inflation rate. With 10-year Treasury bond yield of 5.7 percent and inflation rate (measured by the Producer Price Index) of minus 1.2 percent, we're looking at a 'real' yield of 6.9 percent. My advice: Buy bonds right now, not stocks." (David Goldman, money manager.)

LOCAL PRIDE: Baltimore Gas and Electric, Black & Decker, Manor Care and USF&G are listed under "Top Companies of the S&P 500" in Business Week's March 30 cover story.

QUICKIES: "If there's one thing that has kept this bull market from swelling into a ready-to-pop speculative bubble, it is the decade's astonishing growth in corporate profits." (Fortune, April 13.)

"Low inflation supports higher stock valuations. Lower commodity and import prices suggest inflation falling to 1 percent as the year progresses." (Elizabeth Bramwell, mutual fund manager.)

Pub Date: 3/27/98

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