Adding to Friday's five-point advance, stocks continued to rally yesterday. The blue-chip Dow Jones industrial average gained 27.26 points to close at 3,718.37.
Speaking of blue-chip stocks, Alan Abelson made this surprising observation in Barron's, Dec. 12: "While the big stocks have held up remarkably well, something like 60 percent of all stocks are down this year."
AND NOW WHERE? "Although we suffered a nasty November and early-December market, we don't believe a major setback is in store." (S.& P. Outlook, Dec. 7) . . . "It's time to pay the piper; history says stocks are in for a rough 10 years." (U.S. News & World Report "Investment Outlook 1995" issue, Dec. 12) . . . "Real estate investment trusts are a rare bargain; they have been pounded recently, creating what may be one of today's best buying opportunities." (Fortune "Investor's 1995 Guide" issue, Dec. 26) . . . "A gift of a stock or mutual fund might not make a 6-year-old's face light up on Christmas morning the way Power Ranger figures would but it will undoubtedly mean more 10 years from now than any toy." (Business Week, Dec. 12.)
MARYLAND MEMOS: Under "Municipal Bond Yield Sampler," the S.& P. Outlook shows that with Maryland's combined federal and state tax rate of 35.1 percent ("Assumes federal income tax at the 31 percent marginal rate"), the equivalent taxable yield of a tax-exempt bond at 6 percent is about 9.2 percent and a 6.5 percent yield equals 10 percent taxable equivalent . . . "T. Rowe Price (1-800-638-5660) has announced a new no-load fund focusing on domestic stocks, called 'Price Value.' It will invest in companies that are undervalued relative to assets, earnings and cash flows, seeking opportunities in restructuring and turnaround situations." (Mutual Fund Forecaster, Dec. 1.)
FINANCIAL ADVICE: This Saturday, from 11 a.m. to 1 p.m., I will answer your personal and family financial questions in a private room at Our Daily Bread soup kitchen, 411 Cathedral St., across from the Enoch Pratt Free Library. Just bring a check for at least $25 or a big bag of groceries. Our Daily Bread feeds about 1,000 hungry men, women and children daily, 365 days a year, and needs sugar, oatmeal, peanut butter, jelly, dry cereal, canned vegetables -- and money!
HOPEFULLY HELPFUL: "The Securities and Exchange Commission has set up a toll-free number, intended to help people untangle the mysteries of investing. Call 1-800-732-0330 for information about procedures for filing complaints, how to order investor-protection brochures, etc. Hint: Also call the National Association of Securities Dealers at 1-800-289-9999." (Kiplinger's Personal Finance Magazine, January) . . . "Always understand the basic business of a company you invest in. That's why I'd rather invest in pantyhose than in communications satellites, or in motel chains than in fiber-optics. Never buy stocks in anything you can't draw with a crayon." ("One Up on Wall Street" by Peter Lynch)
MUTUAL FUND MEMOS: In response to many requests, here again is the phone number for The Young Investor Fund, nicknamed The Kiddie Fund. For an information kit and prospectus, call 1-800-338-2550. It's a no-load stock fund geared especially to children's interests. . . . In answer to a recent letter, two top-performing mutual funds that do not invest in companies that manufacture weapons, tobacco, alcohol, etc. are Calvert World Values (phone 1-800-368-2748) with a 10 percent total return for year ended Nov. 1, and Parnassus Fund (phone 1-800-999-3505), 16 percent return.
DECEMBER DECISIONS: "Don't wait 'til New Year's to make these six resolutions," advises Money magazine's 1995 Forecast issue: "(1) Aim to save or invest 10 percent of your gross income annually. (2) Pay off your personal debts. (3) Buy enough insurance against loss of income caused by accident or death. (4) Make the most of your firm's retirement plan. (5) Accept some risk. (6) Keep your hands off your investments." (Regarding No. 6, my first mother-in-law did not make one change in her portfolio from 1934 -- the year her husband died -- until 1984, the year of her death, and she lived comfortably and enjoyed a rising dividend stream every year.
NOTES & QUOTES: "People shouldn't be surprised by the devastating losses suffered by Orange County, Calif., and other funds seeking unrealistically high returns. Every five years or so -- when people's memories have faded -- we get disasters like Old Court Savings & Loan, the junk bond scandal, illiquid real estate limited partnerships, etc. Investigate history before you invest." (Morry Zolet, certified financial planner) . . . "Save a few bucks tomorrow morning; replace that fast-food breakfast or the deli's coffee and Danish with cereal and skim milk. A little fruit on top makes the nutrition even better." (Dollar Stretching Ideas) . . . "Season's greetings from the IRS! That's what the tax break known as a bond swap amounts to -- a year-end gift of otherwise federal dollars. See your banker or broker." (Peter Quick, president of Quick & Reilly) . . . "The 'real' (inflation-adjusted) family income is down 7 percent since 1989, but economists feel the decline will end next year." (Moneypaper) . . . Christmas gift suggestion: "Stocks For The Long Run: A Guide for Selecting Markets for Long-Term Growth," by Jeremy Siegel, in a list, "Best 1994 Business Books" in Business Week, Dec. 12 . . . "When flying, bring your own coffee mug. Flight attendants will fill whatever container you bring, and your coffee will stay warmer longer in a large-size mug." (Bits & Pieces)