Timely hint on stocks: Timing isn't everything


"WORRIED ABOUT overpaying for stocks in this high market?" asks Smart Money, September, in a thoughtful story, "Timing Isn't Everything." Excerpts:

"Putting money in stocks regularly is the safest way to go. Even if you had completely mistimed the market each year, you would be way ahead.

"Say a hapless investor with atrocious timing pumped $10,000 in the S&P; 500 stock average on the worst possible day for the last 16 years -- the day stocks hit their highs. The blunderer's $160,000 would still have been worth $540,000 by June 1995, far better than a T-bill portfolio that only grew to $280,000."

And Peter Lynch, legendary ex-Fidelity Magellan Fund manager, says, "Whether your timing is good or bad doesn't matter much. What matters is that you stay with stocks."

HANG IN THERE: Also, Worth magazine, September, runs a story, "Setbacks and Comebacks," which says, "Great companies' stocks get knocked around in Wall Street corrections, but those setbacks present buying opportunities."

The story gives some 1987 lows and (in parentheses), we inserted approximate current prices: Coca-Cola $7 ($66); Disney ($58); General Electric $19 ($61); Gillette $4 ($45); McDonald's $8 ($39); Merck $14 ($53); Motorola $8 ($81); Procter & Gamble $15 ($75). Dow Jones industrial average 1,738.74 (4,767.40). All prices adjusted for splits.

BALTIMORE BUSINESS: How is business in Baltimore? A unique, accurate barometer is the number of industrial and commercial workers' uniform "add-ons" vs. "layoffs," reported here frequently Ace Uniform Services executives. Milton Halpern, senior vice-president, told us, "The last quarter showed many more layoffs than add-ons, but that partially reflects lots of school kids leaving industry and going back to school. In general, add-ons are down, but business should pick up this fall. It usually does."

POCKET CHANGE: "A penny saved is more than a penny earned because a penny saved is not taxed. If you want to invest small amounts of money at a decent yield, with no risk, put your pocket change into your mortgage by adding modest amounts to your payments each month.

"These prepayments will reduce the amount of your mortgage principal, saving you the mortgage rate. What's more, that amount is tax-free because you're saving it, not earning it. Prepaying $25 a month will save you $26,257 on a 30-year, 8.5-percent $100,000 mortgage." (Moneypaper, September)

HOPEFULLY HELPFUL: "Cut College Costs in Half -- or More," in Money magazine, October, is worthwhile reading. Highlights:

"Schools are now very willing to boost financial aid offers. ... To fill classrooms with well-qualified students, schools often continue such negotiation even after making an offer. This leaves you room to bargain. Get your aid forms in early. Earn credits in advance. Speed up your child's education. Use your computer to track down financial aid." (The article tells exactly how to do this.)

GOOD NEWS: Through January 1996, you can open a new "Young Investor's Fund" (nicknamed "The Kiddie Fund") account with only $100, when you establish an automatic investing plan. This way you put aside $50 a month regularly by automatic transfer from your checking or savings account. The fund invests in stocks children readily relate to -- Disney, Coca-Cola, Nike, Hershey, McDonald's, etc. Call (800) 403-KIDS for details and a thick, free introductory kit.

FREE STATE FILE: "USF&G; Corp. is one of the top 25 property/casualty insurers in the United States, and should benefit from a turn in the insurance cycle." (Legg Mason %J Research Monthly, Sept.)

T. Rowe Price's New Asia Fund and International Stock Fund appear under "13 Routes to Big Gains Around the Globe," in Money magazine, October.

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