Recovering somewhat in late afternoon from a 132-point midday plunge, the Dow Jones industrial average yesterday closed down 57.41 points at 4,628.87. High-tech stocks and bonds were especially weak, but brokers reported an absence of panicky individual selling.
WALL ST. WISDOM: "Stocks have gone into the 'vertical stage' of this meteoric rise, usually any market's terminal phase. Cautious portfolio managers are being pressured to 'get in' or lose their jobs. That's how legendary investor Bernard Baruch felt in 1929, being totally out of the market when people laughed at him. Then he had the last laugh." (Bert Dohmen, The Wellington Letter.)
UP THAT PERCENT! "Small things matter. For example, a 37-year-old with $65,000 in stocks who wants to retire at 75 looks ahead to the 'future value' of his/her account. At 10 percent compound growth it reaches $2.2 million in 2032, but at 12 percent growth soars to $4.3 million. At 15 percent, it's $11.4 million, at 20 percent $55 million. The staggering difference between percents makes it worthwhile to work with your broker." (Stock broker Michael Dougherty Jr.)
NOT TOO OFTEN: "Don't follow your stocks and mutual funds daily because short-term profits and losses color your views. The long-term trend is more important, so monitor progress monthly. You'll still stay on top of the trends without making emotional decisions." ("Money Secrets The Pros Don't Want You to Know" by Stephanie Gallagher, $17.95.)
HOPEFULLY HELPFUL: "Always sign credit cards. Some people don't sign them because they fear that if a card is stolen, a thief could copy their signature and card companies would hold the owner responsible for charges. But an unsigned credit card makes fraud more likely. It's harder for a thief to match a signature than simply to sign an unsigned card." ("The Ultimate Credit Card Handbook" by Gerri Detweiler, $10.95.)
CAREER CORNER: "14 Ways To Stretch Your Paycheck" in Family Circle, Aug. 8, includes: "Take advantage of employee-sponsored savings plans . . . Pay for dependent care with pretax dollars through a 'flexible spending' account . . . Negotiate other perks -- free parking, membership in a wholesale food club, day care, etc. -- if you can't get a raise . . . Try to trade your vacation in for cash . . . Take advantage of tuition-reimbursement programs."
HERE & THERE: Tomorrow night, "Wall Street Week With Louis Rukeyser" focuses on The Kaufmann Fund, with co-manager rTC Lawrence Auriana, and panelists Mary Farrell, Michael Holland and Maceo Sloan.
"When traveling, don't leave the 'Please Clean Room' sign on the door -- it shows your room is empty. Call housekeeping when you want your room cleaned." (Phyllis Stoller, pres., Women's Travel Club.)
My expanded weekday WBAL-TV (Channel 11) schedule now includes local business news and "Tip Of The Day" at 6:15 a.m., and I answer your call-in questions (481-8844) at 6:45 a.m. On Saturdays I take calls around 8:15 in the morning.
YOUR MONEY: The article "Your Quest For Financial Security" in Black Enterprise, August, has many specific suggestions. Samples: "You don't have to be a savvy Wall Streeter to make your money work for you . . . Saving, either a dollar a week or $100 a month, is the best habit you can get into . . . When money grows in a savings account, move it to places with higher yields, like a bank CD . . . When it's time to invest, consider a non-risky mutual fund, some available for as little as $250."
BALTIMORE & BEYOND: Richard Young's Intelligence Report, Potomac, Md., 20854, suggests Topps stock for purchase, explaining, 'The firm is developing collectible picture products for the Batman sequel, which we expect to be a winner.' " (Dick Davis Digest.)
"Municipal Bond Yields Approach 90 Percent of Treasury Bonds" is a worthwhile paper that PaineWebber's Marvin Fribush will mail if you phone 576-3220.
"Sun Stocks" reaching new 12-month highs recently include Citicorp, Giant Food (now around $31, the stock could have been bought around $21 within the past year), Marriott International, Super Rite, Sylvan Learning, Times Mirror (parent of The Sun and The Evening Sun) and Travelers.
JULY JOURNAL: "Invest first in 401(k)s and IRAs. Reason: You buy stocks in regular accounts with after-tax money, and gains are subject to immediate taxation. But 401(k) and IRA accounts grow tax-deferred." ("The Retirement Myth" by Craig Karpel, $18.)
"Investing in companies that are rumored to be takeover targets is risky. While gains can be great if the company is acquired, it's easy -- and costly -- for small investors to be wrong." (David Dreman, investment adviser.)
"Long-term interest rates could fall below 6 percent this year. Intermediate Treasury bonds are the best bet for investors looking for income." (Smart Money, Aug.)
The latest (July 14) Kiplinger Washington Letter says to forget about the flat tax, suggesting that the bill will get lots of political attention but not many votes.
WALL ST. WATCH: "This rise, which has broken many a bear's heart, could shoot up to Dow Jones 5,000 by year-end." (William LeFevre's Monday Morning Market Letter, in Business Week, July 24.)
"I'd like to see this market drop 200 points in one day, so I could put some of this damn cash to work." (Rod Linafelter, manager, Berger 100 Fund.)
"The market may be frothy and overextended, but as they say, 'It ain't over till it's over.' We'll get through most of the summer dog days before stocks turn tail." (Stephen Leeb, The Big Picture.)