Here's how to invest your $10,000

How would you invest $10,000 in the coming year?

I pose that query each year at this time to a diverse group of investment pundits, whose answers generally offer something for just about everyone.


This year, characterized by a flat stock market and rising interest rates, has left many folks bewildered about what to do next.

Average investors have been fleeing poorly performing bond funds and some of the more disappointing stock funds, choosing instead the safety and improving yields of certificates of deposit, money-market funds and Treasury bills. But while yields greater than 5 percent from such investments certainly look better than negative returns, there's still a need for long-term growth in a portfolio.


Here are suggestions for that 10 grand in 1995, with many of the experts favoring opportunities in bonds as well as in stocks:

* Charles Clough, chief investment strategist for Merrill Lynch: "Put $4,000 in long-term bonds, $4,500 in stocks and $1,500 in cash. Short-term rates will go up another one-half to 1 percent. Long-term rates will be stable, maybe declining one-half of a percent by summer. In stocks, I like Beacon Properties, Caterpillar Inc., Hewlett-Packard and Automatic Data Processing. The year will be strong for small-company stocks, too."

* Martin Jaffe, president of the International Association for Financial Planning: "I suggest $5,000 in Treasuries or high-quality municipal bonds with durations of 10 years or less, then $5,000 in stock funds such as our own Winthrop Aggressive Growth Fund and a global fund like Warburg Pincus International Equity. The Dow Jones industrials will move to 4,100, while the 30-year [Treasury] bond will come down to 7.5 percent by year-end 1995."

* Marshall Acuff, portfolio strategist for Smith Barney: "Buy bonds or bond funds, because, while rates will rise further, they'll be lower by the end of 1995. Place $3,500 in bonds, $4,000 in equities and $2,500 in cash. The Dow will probably be down through the first quarter, but I like total-return stocks such as Exxon Corp. and Carolina Power & Light."

* John Rekenthaler, editor of the Morningstar Mutual Funds investment advisory publication: "Put $7,500 in stock funds, the rest in bond funds. Because they're down in price, I recommend AIM Weingarten, Pasadena Growth, Founders Blue Chip or Fidelity Mid Cap Stock Fund. I like small international stock funds T. Rowe Price International Discovery or Scudder Global Small Company Fund. Strong Municipal Bond and Loomis Sayles Bond are good bond funds. The economy will be fine, and the rise in [yields of] long-term bonds is just about done."

* Joe Granville, editor of The Granville Market Letter in Kansas City, Mo.: "Go with three-month Treasury bills, because it's the safest place in this major bear market. I see rates heading much higher while equities go lower. Long-term bond rates will be 9 percent, the Dow hitting a bottom of 2,000. Recession will begin before year-end 1995."

* Robert Dederick, former chief economist and now consultant to Chicago's Northern Trust: "Put $4,500 into intermediate-term bonds, $3,000 in stocks and $2,500 in cash. There are risks of higher rates and declining stock prices. Expect rising short-term rates through the first half, with the long-term rate at around 8.5 percent. Financial markets are still at risk."

* Edward Yardeni, chief economist for C.J. Lawrence: "Place $3,000 in Treasury bills or money-market funds for now and $2,000 in five-year Treasuries. Put $2,000 in an international stock fund and $3,000 in the stock market. Global growth stocks such as Coca-Cola Co. and Gillette Co. look good. Short-term rates will rise by March, but the bond yield will peak out just below 8.5 percent in the first half. By year-end 1995, the Dow will be at 4,200 to 4,500."


* Louis Navellier, publisher of MPT Review, an investment letter based in Incline Village, Nev.: "Select a mixture, with $5,000 in my own Navellier Aggressive Small Cap Fund, $3,000 in Crabbe Huson Special Fund and $2,000 in Royce Premier Fund. Long-term bonds will stay below 8 percent, and the Dow will hit 4,600. The economy's fine. It will just slow down and be selective."

* James Dines, publisher of The Dines Letter, Belvedere, Calif.: "A conservative person should put $5,000 in Treasury bills to be used later to buy securities and $5,000 in gold and silver shares. An elderly person should place the $10,000 in T-bills, and a younger person in gold and silver stocks. I like Placer Dome, Anglo American Corp. and American Barrick. The Dow will hit 4,200 early, then go lower."