Investment Trusts

Stocks rode a roller-coaster all day yesterday, with the Dow Jones industrial average closing with a minor loss. The blue-chip indicator slipped 6.46 points, finishing at 3,749.45. Technology stocks were especially weak after reports of lower earnings.JUNE JOURNAL: "Given the sharp ups and downs of real estate investment trusts over the past two decades, it seems incongruous to mention them in the same breath as conservative utility stocks. But with higher interest rates, regulatory problems and competition threatening utilities' generous dividends, investors are increasingly turning to high-yielding equity real estate investment trusts, otherwise known as REITS."

Corporate Office Properties Trust said Monday that it had sold two office buildings and land in Rockville for about $48.7 million, part of the Columbia-based real estate investment trust's strategy of selling off non-core assets. COPT, which develops, owns and manages office buildings primarily for government agencies and contractors in the defense information sector, has sold $116.9 million worth of properties and land since the beginning of the year. Since last April, the company has been selling suburban office buildings to focus on high-security offices for defense tenants.

ADVICE FOR this roller-coaster market:"There's a Red Tag Sale on Blue-Chip REITS (real estate investment trusts). Although property markets are strong, nobody loves property stocks. Many are on clearance racks; it's a buying opportunity." (Forbes, Nov. 1)"More likely than `Dow 36,000' -- the title of a new best seller -- is Dow 3,600, only a retreat to a 12.5 price-to-earnings ratio." (Jeremy Grantham, investment strategist)"If you have 25 or 30 years to retirement, what happens today isn't terribly important in the grand scheme of things."

Omega Healthcare Investors Inc., a Hunt Valley real estate investment trust that finances the long-term care industry, has acquired 63 long-term care facilities for $295 million, the company said. Omega acquired facilities in 19 states with a total of 6,607 beds under an option agreement with the seller, affiliates of CapitalSource Inc., for $34 million in cash and the repayment of $261 million in debt. The sale is expected to close in June. Omega had acquired the option to purchase the facilities as part of a previously announced securities purchase agreement with CapitalSource that included the acquisition in December of entities owing 40 facilities.

RECONSIDER REITS: Although real estate investment trusts have underperformed many hi-tech stocks recently, REITS might now be worth considering. "Rents are rising, space is scarce, shares are cheap - it all adds up to penthouse prospects for real estate investment trusts," says Individual Investor, September. "Through mid-July, the National Association of Real Estate Investment Trusts index generated a total return (gain plus income) of 18 percent. During the same period, the best most major stock indexes could do was to break even."

ALTHOUGH STOCKS staged a partial recovery yesterday, many investors still worry about minimal growth of principal. But how about concentrating instead on high returns from dividends? "Dividend stocks are coming back in style," says Family Money. "When other stocks were rising at double-digit rates, a four percent dividend didn't look very sexy. In a sharply 'down' market, however, that guaranteed return can keep a stock's price afloat." High-dividend categories include utilities, real estate investment trusts (REITS)

Tribune Co. is sticking with its $2 billion stock repurchase and will complete it next week, despite opposition from one of its largest shareholders, Tribune's top executive said yesterday. Speaking at an industry conference in New York yesterday, Chief Executive Officer Dennis FitzSimons said the buyback announced May 30 is "on track." Tribune, which owns The Morning Call, the Chicago Tribune, Los Angeles Times and The Sun among its newspapers, is repurchasing up to 75 million shares of its stock in a bid to boost its sagging stock price.

WITH MANY high-tech stocks in the stratosphere, have you considered buying "down-to-earth" household products stocks?"Household products issues have appeal," says S&P Outlook. "Despite slow growth in the U.S., new products and expanding overseas markets make many of them worth buying."It suggests Church & Dwight Co. Inc., Clorox Co., Colgate-Palmolive Co., Dial Corp., Newell Rubbermaid Co., Procter & Gamble Co. and Tupperware Corp."In due time, higher bond yields are in order. The U.S. economy is strong and the only way to slow it down: higher interest rates," predicts Yamamoto Forecast.

"AS THE U.S. stock market continues to struggle, many investors remain dazed and angry," says Financial Planning Perspectives. "Some had to postpone planned retirements or find themselves without enough money to pay hefty bills. But the bear market taught us tough but valuable lessons: "Don't jump around, buying the `hot' stocks and getting burned. ... The market taketh as well as giveth; 90 percent of today's investors came into the market after 1990, never knowing any direction but up."

ARE YOU thinking of buying real estate investment trusts (REITs) for high income, often up around 8 percent? Proceed carefully. Here, according to Forbes, June 14, are danger signals:"Dividend shouldn't exceed 80 percent of a REIT's operation funds. Look past financials and examine properties. Gritty properties are the first to lose tenants. Avoid REITs whose debt exceeds 150 percent of equity."START YOUNG: "If you make a $2,000 annual contribution to an IRA at age 25 and stop at age 35, you'll end up at age 65 with $895,612," says Money, July.

Editor's note: Every Sunday through the end of tax season, The Sun will run an edited transcript of Baltimoresun.com's weekly tax advice column featuring experts from the Sparks accounting firm SC&H Group who will answer reader questions. Submit questions at www.baltimoresun.com/ taxtalk Is it true that stock and money market investments on 1099s can be modified through late March? I've heard that investors should not file their taxes until late March or early April to avoid having to file an amended return should they receive a revised 1099.

Provident Bankshares, the biggest Maryland-based banking company, is the rare lender that hasn't admitted huge mortgage losses in the worst housing market in decades. Financial ghoul that I am, I rang up Provident and grilled its bosses on mortgage exposure. I found some risk -- and $58 million in unrealized losses on mortgage bonds and other debt securities at the $6 billion bank.

Tribune Co. is sticking with its $2 billion stock repurchase and will complete it next week, despite opposition from one of its largest shareholders, Tribune's top executive said yesterday. Speaking at an industry conference in New York yesterday, Chief Executive Officer Dennis FitzSimons said the buyback announced May 30 is "on track." Tribune, which owns The Morning Call, the Chicago Tribune, Los Angeles Times and The Sun among its newspapers, is repurchasing up to 75 million shares of its stock in a bid to boost its sagging stock price.

Though many workers, executives and political leaders in the United States and other industrialized nations see the advancing Chinese behemoth as an economic threat, perhaps they should view China as the West's new land of opportunity. According to Chinese news reports, vetted by the government, China expects to build more than 300 new cities over the next five years, bringing the total number of Chinese cities with populations over 200,000 to 1,000. By contrast, the United States has 125 or so. More remarkably, by 2010, less than five years from now, close to 200 Chinese cities will have populations of a million or more.

The last time the office market was this lousy, Manekin LLC made a fleeting foray into residential development. This time, the Columbia company best known for building, brokering and managing offices says it has branched out for keeps. Projects in early stages in Harford County, Cecil County, Delaware and Pennsylvania will produce in excess of 3,500 lots over the long haul - more than a decade - for the company to sell to builders. "Rather than starting small, we're starting large," said Richard Alter, president and chief executive officer of the 150-employee company.

MILWAUKEE, Wis. - As Wall Street firms reached a $1.4 billion conflict-of-interest settlement with regulators, a nonprofit group that has never had a permanent staff or office won a $27.5 million windfall to teach investors to avoid scams. The Investor Protection Trust, whose budget last year was $300,000, will get the money from six firms over five years to pay for local conferences, teaching manuals and videos for teen-gers. The largest sum - $12.5 million - will come from Citigroup Inc., the world's biggest financial services company, according to regulatory documents released in the agreement.

"You can own as many IRAs as you want," says Tax Hotline, "and it is a good idea to have several. Having multiple IRAs keeps funds locked up longer - to earn more tax-deferred returns, meet family goals, reduce estate taxes and attain other valuable objectives. Multiple IRAs also allow more flexibility in managing tax-deferred assets. For example, each IRA can have different beneficiaries, and you can transfer funds between IRAs without paying taxes until age 70 1/2 ." WALL ST. WATCH: "There is a new appetite for U.S. Treasury bonds.

ALTHOUGH many people realize -- and take advantage of -- any "pretax" retirement plan offered to them, such as a 401(k) or 403(b), some people may not know what alternative action to take if their firms don't provide such programs."

David M. Fick, the Legg Mason Wood Walker Inc. analyst who on Tuesday accused the Rouse Co. of improper accounting, is known for telling it like it is. His boss describes Fick as a "bulldog, absolutely tenacious." Executives at companies he analyzes for investors call him strong-minded, opinionated and fiercely independent. "David has strong opinions and isn't shy about letting you know what his opinions are," said F. Patrick Hughes, president and chief executive of Lutherville-based Mid-Atlantic Realty Trust.

NOTES, QUOTES and suggestions about your money: "Most participants in 401(k)s rode out the market decline last year without altering allocations. Participants on average invested 75 percent in stocks." (Employee Benefit Research Institute) "There's no such thing as risk-free investing. When you buy stocks, you take the chance your money will disappear. Yet by leaving money in the bank, you almost guarantee that your buying power will diminish." (Money magazine) "REITS [real estate investment trusts]