Investors not yet ready to abandon stock market

The Ticker

January 31, 2001|By JULIUS WESTHEIMER

In this unsteady market, will investors cut and run? "Not yet," says Jim Bianco, market strategist. "Investors won't abandon the stock market en masse until most of their paper profits disappear. Only then will they jump ship and not jump back in."

STAR GAZING: These stocks are included under "Rising Stars" in the latest S&P Outlook: EMC Corp., Integrated Device Technology Inc., Dime Bancorp Inc., Duke Energy Corp., Masco Corp., Southwest Airlines Co. and Becton Dickinson and Co.

WRONG PRIORITIES: "People spend weeks - even months - researching which car to buy, but invest thousands of dollars in companies they know nothing about. One client who invested $15,000 in a speculative penny stock figured he didn't need to know anything about the company because the stock was so cheap. Six weeks later it was 60 percent cheaper." (Karen Altfest, financial planner)

SLOWDOWN STRATEGY: "Smart moves as the economy slows: Consider bonds. Although coupon rates are low, bonds will rise in value as rates fall further. Also, buy small- and midcap stocks." (Deborah Allen, investment consultant)

STOCK WATCH: "There are growing signs that the market has hit bottom. Advancing stocks now outnumber declining stocks on most days and new highs heavily outweigh new lows." (Cabot Market Letter)

"If tech stocks survive January without much damage, the money flow from defensive sectors into beaten-down techs that began early this month could accelerate." (Maniar's Moneygram, in this week's Barron's)

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