Optimism, autos lead Dow index to another gain


The Dow Jones industrial average added to Friday's 22-point rally yesterday and finished with a solid gain. Led by auto stocks, the Dow indicator climbed 23.89 points and closed at 3,821.32. Investors appeared optimistic about third-quarter earnings figures, many of which will be reported this week.

BALTIMORE BEAT: Black and Decker stock is listed under "Selected Stocks" in Financial World, Oct. 11. The text explains, in part, "Black & Decker sells at a reasonable price-earnings ratio, and the company should benefit from a European earnings turnaround in 1996." . . . Write Steven Norwitz, c/o T. Rowe Price, 100 E. Pratt St., Balto., Md. 21202, for the firm's fall report, an illustrated, easy-to-read publication called "Is Growth Investing Poised For a Comeback?"

STAY HEALTHY: Bankers, brokers, business people, etc., who worry about possible heart attacks from tension: The Harvard Health Letter, October, under the title, "A Heart Attack Waiting to Happen?" says "real" cardiac risk factors are: male, smoker, sedentary, overweight, diabetic and high blood pressure. The story adds that the following are "bogus" risk factors: coffee drinker, television addict, left-handed, short and bald (see accompanying photo).

NOTES & QUOTES: "It will take much more than Fed tightening to slow the economy, since consumers have insulated themselves from rising interest rates." (A. Gary Shilling, economist) . . . "Consider setting up a nondeductible IRA account. Now that the top tax rate is 39.6 percent, the tax deferral built into your IRA account is more valuable than before." (Tax Hotline) . . . "To raise cash, sell a bit of each of your investments. It's not a cop-out -- many professional money managers do it. If you choose only one investment you could be dead wrong, and once you sell, it's hard psychologically to buy in again." (Ronald Ognar, manager, Strong Growth Fund.)

RAISING CASH: In response to several letters, here is a brief explanation of reverse mortgages, from a recent Standard & Poor's Outlook: "Reverse mortgages allow mostly elderly people and retirees to convert equity in their primary residences to a cash stream, a lump-sum loan or the currently most popular alternative, a line of credit. Eventually, you or your estate sells the house to pay off the loan. Retirees who are house-rich and cash-poor could benefit from this strategy." See your banker or real estate person for further details.

MONEY SAVER: "Save big on airfares by studying a map before you buy tickets. Make a list of cities within driving distance of your destination and ask about fares to those cities. Example: A recent round-trip fare from Chicago to Cincinnati for a family of four cost $1,028. By flying to Louisville, a route with a 'Friends Fly Free' program and only one hour's drive from Cincinnati, the family's round-trip fare was only $196." (Tom Parsons, editor, "Best Fares Discount Travel.")

BUYING GUIDE: "Here is a good municipal bond-buying strategy: Unless you plan to hold bonds to maturity, diversify across five to 10 issues . . . Stick with AAA-rated issues or even 'pre-refunded' or 'escrowed' bonds so you don't have to worry about credit risk. (Your bond dealer can explain those terms.) . . . For interest-rate protection, 'stagger' maturities among short, medium and long-term bonds . . . Make sure there are no hidden 'call' provisions . . . To get the best prices, comparison shop." (Business Week, Oct. 10)

AUTUMN LEAVES: "If you have a nest egg and want to make it grow, you don't need a hot hand with stocks. All you need is a sensible plan, and compounding will do the rest." (David Dreman in Forbes, Oct. 17) . . . "The public has begun to buy CDs again and that could hurt new purchases of mutual funds. Bullish ads in Barron's have hit a record high, a poor sign. Stock market risk is now extremely high." (The Zweig Report) . . . "Any investment that pays more than a bank involves risk; if it doesn't make sense to you, don't buy it . . . Pay off debts as soon as possible" ("Skip Weldon's Rules For Keeping More of Your Money")

LAST LINES: "Defer income into 1995. If you have self-employment income from a business that uses cash-basis accounting, delay sending out bills until late enough in the year so that receipts won't come in until 1995. If you're an employee, negotiate with your employer to receive bonuses after year-end." (Coopers & Lybrand) . . . "If you're about to turn 55, it generally pays to start drawing your pension early. Even though you get smaller payments than at age 65, in most cases you're better off investing your pension yourself." (Smart Money, October) . . . "Shift investments from stocks to bonds at a gradual rate as you grow older. The percentage of your portfolio invested in stocks should equal the number 100 minus your age." ("It's Never Too Late to Get Rich" by James Jorgensen.) . . . "Institutional investors have a pot of money -- $8.3 trillion, just-released data show. More than half of that is held by pension funds." (Business Week's 65th Anniversary Issue, Oct. 17.

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