Where to invest money you might want soon

The Ticker

May 10, 2000|By Julius Westheimer

While deciding whether to buy stocks - or which ones - do you wonder where to park short-term money?

Here, from Morningstar.com, are suggestions for money you might need soon:

"Money market accounts are safe and pay more than bank accounts.

"Ultra-short bond funds yield slightly more than money funds but at some increased risk. They buy issues maturing in about six months.

"Short-term tax-free bond funds buy issues with terms up to 3 1/2 years. They rise in price more than ultra-short bond funds when interest rates drop but fall more when rates increase."

MAILBAG: Carolyn K., Finksburg, writes: My father just gave each of my 1-year-old children $5,000. When investing for them, should I buy them the same or different stocks?"

The same. Family disputes often arise later if one child owns a highly successful investment and the other suffers with a dog.

CHEERY OUTLOOK: "The hi-tech mania is starting to ebb. That's good news because the playing field has expanded - we're no longer seeing gains in just one sector. Strategy: Diversify your holdings." (Robert Stovall, strategist, Prudential Securities)

WALL STREET WATCH: "Many investors now analyze prospective investments, but volatility will remain as long as day traders scour for big hits. Keep those smelling salts close at hand." (Fortune)

"Undervalued stocks are ripe for a comeback. Investors won't keep plowing money into pricey, speculative stocks when beaten-down blue chips are selling at the cheapest levels in two years." (David Dreman, money manager)

"Continue to avoid overpriced high-tech stocks. Only when they show profits or earnings should they be considered appropriate investments." (Barron's)

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