Utilities looking interesting even as dividends matter less


HERE ARE TIPS to think about when you're deciding how to invest your money.

"Havens in times of market turmoil, utility stocks are showing new life. While the Dow industrials toppled about 2 percent from their May 3 peak, the Dow utility index climbed 4 percent. At this point, we're looking for utility opportunities like those in transportation and banking sectors when they were deregulated." (Barron's)

"Although dividends are important to older investors, payouts matter less than formerly. Years ago, high dividends 'cushioned' a bear market, but that hasn't worked for a long time." (American Association of Individual Investors Journal.)

"Recommended Quality Stocks" in S&P; Outlook, June 3, include Bristol-Myers Squibb Co., Clorox Co., Gillette Co., Hershey Foods Corp., Johnson & Johnson Inc., Merck & Co. and Pfizer Inc.

"Here are 'red flags' to watch out for when selecting -- or staying in -- a mutual fund. Beware of funds which lag peer groups for 18 months; where the expense ratio climbs significantly; when new FTC charges are imposed, such as a 12b-1 marketing fee; where assets surge so much that investment style must change to keep pace; and where management changes often and a new manager shifts the fund's objective significantly." ("How Mutual Funds Work" by Albert Freedman.)

"Wall Street's graveyards are filled with investors who were right too soon." (Stock Trader's Almanac.)

Pub Date: 6/12/98

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