Stocks fell faster than presidency during last impeachment season

The Ticker

October 28, 1998|By Julius Westheimer

WHAT HAPPENS TO stocks when a president gets into trouble? "The last time a president faced impeachment," says Fortune magazine, "the Dow average plunged 40 percent. Things were grim then, but today we're not plagued by long gasoline lines, runaway inflation and recession."

"With stocks fluctuating wildly, make volatility work for you by 'dollar-cost-averaging,' " says Money magazine. "With stocks more volatile than in 50 years, invest a fixed sum at specific intervals, thereby picking up more low-priced shares when stocks fall."

Looking for safety and a short maturity? "The two-year Treasury note recently sold for 'par,' meaning the government will return your principal in two years, no matter where interest rates travel. This is a low-risk investment people should use during these risky, volatile times." (Global Market Strategist.)

Looking for a good value? "Real estate investment trusts (REITS) are now the most attractive they've been since 1990," says Financial Planning. "The average REIT pays over 6 percent, a wide spread above Treasuries by historical standards."

"Human nature gets us too wrapped up in enthusiasm or despair. I'm confident stocks will rise in the long run." (Professor Jeremy Siegel, Wharton School of Finance.)

"Losing money feels twice as bad as making money feels good." (Richard Thaler, University of Chicago economics professor.)

"Alan Greenspan is a very persuasive fellow, indeed, but so was the Wizard of Oz -- for a while." (Cantor Fitzgerald's Morning News.)

"Based on the pattern of popular averages over the last 35 trading days, it appears the market is bottoming out -- but don't bet on it." (Winell Report.)

"Downside appears limited with odds significantly favoring those who feel we have seen the bear market low." (The Leaderboard.)

Pub Date: 10/28/98

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