6 tightenings aren't always a wrenching experience

The Ticker

June 21, 2000|By JULIUS WESTHEIMER

Do you fear another interest rate increase when the Federal Reserve meets in a week? Calm down.

"The Fed hiked interest rates six times in 1999-2000," says Barron's. "The last time this happened was in 1994-'95 when stocks rallied 25-30 percent after the sixth tightening. A repeat would push the Dow over 13,000 by next spring."

THINK SMALL: "This year, the S&P 500 gyrated over 2 percent on 20 percent of trading days," says Smart Money. "We suffered such volatility twice before - the sickening 1974 slide and just before the 1987 crash. Now small-cap issues will be the best bargains, usually strong performers when business slows."

"Take some profits from Internet and speculative companies and invest in blue chips - or at least companies with earnings." (Irwin Kellner, chief economist of CBS MarketWatch)

WALL STREET WATCH: "The Wall Street ostriches are at it again, hiding their heads in the sand to escape reality." (Investment Quality Trends)

"The percentage of stocks above their own 10- and 30-week moving averages are both moving up, and the market is not yet overbought." (Investors Intelligence)

"Resist the temptation to switch to `better' mutual funds - unless yours have performed poorly long-term." (Bottom Line)

"Many bulls claim this is a Nasdaq correction, not a bear market. If this isn't a bear market, it's surely a `slow crash.' We're in the second deepest bear market -1974 was the worst - in Nasdaq history." (All Star Fund Trader)

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