Stocks outstrip all investments in half-century

The Ticker

September 05, 2001|By JULIUS WESTHEIMER

BEAR MARKET got you down? Cheer Up. "Stocks have given investors the highest returns of any investments over the past 50 years," says an Ibbotson Associates study, "Stocks, Bonds, Bills and Inflation."

"Annual average rates of return: S&P 500-stock index 12.77 percent; Salomon Smith Barney Long-Term Corporate Bond Index 6.18 percent; One-month Treasury bills 5.24 percent. Inflation rate 3.97 percent."

ROTH RUNDOWN: "There are ways to qualify for a Roth IRA," says Ed Slott's IRA Advisor. "If you earn six figures, reduce your adjusted gross income and stay within IRS limits. Examples: Take many deductions - alimony, capital losses, etc. Reduce taxable income: Defer receipt of salary, add to tax-free bonds. Deduct business expenses if self-employed."

INFLATION WORRIES: "Remember this about risk: You can't avoid it. Don't think only of volatility when assessing risk - will I lose my money? A more important concern should be how to maintain your purchasing power in the face of inflation. Never overlook stock mutual funds." (American Funds Group newsletter)

WALL STREET WINDOW: "Can we be super-bearish? No, not with seven rate cuts and stocks above their April lows. Super-bullish? No. Becoming impatient? Definitely, but every day brings us closer to the end of this bear market." (Systems and Forecasts)

"Once the economy revives with a high rate of inflation as a starting point, bonds will see tough going as the market takes interest rates higher." (Capital Growth Letter)

"Panic is too strong a word, but this market has a sense of people throwing in the towel - wholesale selling. We're very nervous." (Jon Bronson, stock director, Northern Funds)

"Any buying is a sign that professional investors are willing to grab beaten-up stocks that appear cheap." (Jeff Rubin, research director, Birinyi Associates)

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