Stocks that raise the dividend may be best bet

The Ticker

August 12, 1998|By Julius Westheimer

IN THIS down-and-up stock market, with the Dow Jones average 875.12 points below its all-time high, where should you put money now?

For safety, invest in fixed-income securities -- certificates of deposit, Treasury or tax-free bonds, bond funds, money market funds, etc. If you buy CDs or bonds, "ladder" your maturity dates; this strategy eliminates worry about interest rate fluctuations.

Investments I like better -- although they carry more short-term risk -- are stocks, especially those that consistently raise dividends enough to outpace inflation. Examples of companies that meet that standard are Bristol-Myers Squibb Co., Coca-Cola Co., Exxon Corp., General Electric Co. and Procter & Gamble Co.

If you bought Coca-Cola Co. stock 10 years ago, for example, you would now receive an 11 percent dividend return on your investment, which excludes appreciation from 1988's median price of $5 a share, adjusted for splits, to today's price of about $80.

Speaking of risk, there's also danger in being out of stocks. For example, you would have missed 16 years of a Dow Jones leap from a 1982 low of 776.92 to today's level.

LATE NEWS: This week's (Aug. 17) New Yorker magazine carries a chilling article, "Pricking the Bubble: History Suggests a Stock Market Crash is Likely," by John Cassidy, financial writer.

HAPPY NOTE: Beginning this week, Treasury bills are available to the public in minimum amounts of $1,000. The previous T-bill minimum was $10,000.

Pub Date: 8/12/98

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