September, over the years, has punished investors the most

The Ticker

September 02, 1998|By Julius Westheimer

With the Dow Jones industrial average this morning down 1,510.54 points from its July 17 all-time high of 9,337.97 -- despite yesterday's impressive 288-point rally -- do you worry about your stock investments? Here are some guidelines:

"September has historically been the year's worst month as measured by the Dow Jones industrial average and the S&P 500 over 46 years," says the Stock Trader's Almanac. "The Dow average showed a September gain only seven times in the last 27 years."

Thinking of buying an index fund? Data show that owning the S&P 500 Index Fund is no guarantee against loss. In the 1973-'74 bear market, the S&P 500 plunged by about 45 percent.

But does that mean rushing to mutuals funds? Financial adviser David Dreman says: "Of 7,000 mutual funds, only one in 10 beat the S&P 500 stock index in any 10-year period. The winners dwindle if you go out 15 years or more."

"History suggests most bear markets wipe out at least half the gain of the preceding bull market," says the Dow Theory Letter. "Since the bull market started in 1974 at Dow Jones 577.60, I look for it to fall back to under 5,000 -- yes, 5,000."

QUICKIES: "There are only two emotions in the market -- hope and fear. The problem is, you hope when you should fear, and you fear when you should hope." (Jesse Livermore, legendary stock trader.)

Pub Date: 9/02/98

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