After encouraging testimony by Federal Reserve chief Alan Greenspan yesterday, stocks and bonds moved higher.
The Dow Jones industrial average climbed 9.08 points and closed at 3,973.05, only 14 points below its all-time high and 380 points above its 12-month low.
The yield on long-term government bonds fell to 7.54 percent, compared with an 8.16 percent return in early November.
HOPEFULLY HELPFUL: " 'Buy Low and Sell High' is the Golden Rule of investing. The best way to do that: Dollar-cost average -- invest the same amount of dollars each month.
When your stock's price drops, you buy more shares, reducing the average cost at which you buy." ("No-Load Stocks" by Charles Colson, $14.95.)
(Ticker example: By investing, say, $100 a month, you could now buy 4 shares of Baltimore Gas and Electric Co. stock -- about $25 a share -- every 30 days. If, however, the stock price drops to $20 a share, you would buy 5 shares with the same $100, increasing your number of shares with the same money. If the stock's price rises sharply, you buy fewer shares but you show a profit on what you have purchased.)
HIGHER GOAL: Mr. Colson's book adds, "A more aggressive strategy: 'Value average' by investing to raise your portfolio's value by a set dollar amount each month. Say you want your portfolio to go up $500 each month. If it rises $200 due to stock price moves, you invest only $300. But if it drops $200, you invest $700, magnifying the 'buy low' effect. 'Value averaging' beats dollar-cost averaging 90 percent of the time."
LOOKING FOR WORK? The "Hottest Jobs in America," according to Money magazine, March, are, in order: Computer engineer, computer systems analyst, physical therapist, teacher (special education), private detective, radiologic technician, paralegal, legal assistant, teacher (preschool and kindergarten), entertainer (producer, director, actor) and legal/medical secretary. The special pullout section, "Worklife '95," is worth studying.
MARYLAND MEMOS: "Lockheed Martin, the combined company to be based in Bethesda, Md., will be the world's largest defense contractor. By eliminating overlapping operations, the firm will eliminate $2-$3 billion in operating costs, allowing the firm to outbid defense competitors. Martin Marietta's share price could reach $60 within 18 months, a 36 percent gain." (Lior Bregman, analyst, Oppenheimer & Co.)
BALTIMORE BITS: Procter & Gamble, with two facilities here, is listed under "Stocks That Figure to Gain a Healthy 10 Percent in 1995." (Money, March) . . . Tomorrow night, "Wall Street Week With Louis Rukeyser" spotlights drug stocks with Merrill Lynch Vice President Richard Vietor and panelists Frank Cappiello, Bernadette Murphy and Robert Stovall . . . Program Change: I now bring you "Tip Of The Day" each weekday at 6:15 a.m. and answer your questions at 6:45 a.m. on WBAL-TV, Channel 11. I also take questions on Saturdays at 8:15 a.m. and at noon on Mondays and Wednesdays.
MARYLAND MAILBAG: Michael Dougherty of Ferris, Baker Watts & Co. will mail you his 20-page booklet, "How To Use Your Stock Broker" if you phone him at 659-4677 . . . Call Legg Mason's Gerald Scheinker (486-8010) for his firm's latest 28-page "Research Weekly," with information on Black & Decker ("Earnings estimates raised") and Loyola Capital ("Strong fundamentals and See outside possibility of a future takeover") . . . Dean Witter's Rick Faby will mail "Analysts' Commentary: We Still Like Stocks and Bonds Over Cash -- Bonds The Best" if you phone him at 583-5278.
LOOKING AHEAD: "Our forecast calls for an easing of interest rates, with total return of fixed-income investments making pleasant reading this year." (S&P; Outlook, Feb. 15) . . . "The 'mantra' for the long-term investor should be stocks, stocks, stocks." (Kiplinger Personal Finance Magazine)
Ticker Note: "Mantra" is defined as "Sacred formula believed to have magical powers" in American Heritage Dictionary . . . "Stocks deliver the best inflation-beating returns of any investment. Inflation rose an average 3.1 percent annually over 68 years, but stocks posted gains of 10.2 percent." (Ibbotson Associates)
WHAT YOU SAID: From your postcards in our Dow Jones forecasting contest: "I pick 3,992 -- Happy sailing." (Doris Wade, last year's dinner winner -- Crab Shanty) . . . "Short-term interest rates will be raised, but the stock market goes up more than down, so I say 4,002 for year-end." (Joseph Lerner) . . . "I'm a cockeyed optimist; I predict 4,375." (Mrs. Kenneth Thompson) . . . "It'll be 3,564, my safe-deposit box number." (A. Donald Schmidt) . . . "Mounting consumer debt will bring business slowdown. I pick 3,712." (Bill Moore) . . . "4,141. A good year but not a great year." (Bob Stocksdale)
WHAT THEY SAY: "We may see the best performance early this year. Interest rates will go lower than most people think, and stocks will move higher." (Byron Wien, investment strategist, Morgan Stanley) . . . "Stocks face a stiff head wind from rising short-term interest rates." (Advest Research Report) . . . "It's clear you have enough negatives that you should be selling, and not selling into the next rally because there may not be the next rally." (Justin Mamis, author, Hancock Institutional Letter) . . . "We are finding more undervalued stocks than at any time in the last three years." (CLR Investment Letter) . . . "We are due for another major decline, especially given the many similarities between now, 1972 and 1929." (Korty Research's Investment Direction)