Secure dividends can help fend off the bear

The Ticker

April 06, 2001|By JULIUS WESTHEIMER

IS THERE a way to survive this bear market?

"A secure dividend can provide some downside protection in a severe market slump," says Forbes, April 16. "The following companies have yields of over 4 percent and five-year dividend growth rates of 11 percent [annualized] and attractive dividend reinvestment plans."

The list includes BancorpSouth Inc., Citizens Bankshares Inc., Compass Bancshares Inc., Sky Financial Group Inc., UnionBanCal Corp. and Wachovia Corp.

GOOD ADVICE: "The people who suffer the worst losses are those who overreach. It's not necessary. Steady, moderate gains will get you where you want to go." (John Train, author, "The Money Masters")

"Declines in stock prices did not cause the late T. Rowe Price to sell. If he thought a firm had future prospects, this was an opportunity to buy more." (George A. Roche, T. Rowe Price Associates)

TAX TIP: File your 2000 return by April 16, 2001, even if it is impossible to pay the tax. On-time filing avoids penalties, which are one-half of 1 percent per month based on tax due. Filing stops the penalties - not the interest.

"Caution: Requesting an automatic four-month extension to file a return does not extend the time for payment of tax." (Tax Hotline)

WALL STREET WATCH: "We're on the other side of Everest. The Dow Jones stocks outperformed the Nasdaq by 50 percentage points in the last year after trailing by 61 percentage points in the six months ending March 31, 2000." (Ted Aronson, money manager)

"We don't look for super-fast growth rates. We search out undervalued companies with proven records and solid outlooks, yet are overlooked by this market." (Eric McKissack, manager, Ariel Appreciation Fund)

"2001 is likely to be a good year for prudent investors. Since 1913, whenever the Fed lowered interest rates, stocks soared an average of over 20 percent a year." (The Retirement Letter)

"Small stocks haven't been this cheap in over 20 years. With the Fed lowering interest rates, I expect smaller stocks to gain 12 to 14 percent this year - significantly outperforming larger Dow Jones stocks." (Satya Pradhuman, small-cap research specialist)

"To find a fair P/E ratio for the average blue-chip stock, subtract the inflation rate from 20. Example: With 3 percent inflation, P/Es below 17 are cheap." (Michael Sivy, author, "Rules of Investing")

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