"THE best deals for risk-averse investors are in high-quality corporate bonds," says manager of Fidelity Balanced Funds, Kevin Grant."They pay about one percentage point more than Treasuries of similar maturity, and there's little chance that quality bond issuers will falter during a recession." Are you looking for solid investments? Money magazine, November, lists these "Ten Stocks for a Dangerous World," explaining, "No investment is risk-free, but these companies have steady earnings and strong balance sheets _ and are reasonably priced."
British American Tobacco PLC ADRs, Citigroup Inc., Dow Chemical Co., Equity Residential Properties Trust Inc., General Electric Co., Johnson & Johnson, Kimberly Clark Corp., Kroger Co., Pfizer Inc. and Radiant Energy Inc.
GOOD ADVICE:
"The bear market emphasises this fundamental: Only long-term money should be in the market. Long-term has many definitions, but I feel safe putting money I won't need for three years into stocks. In 2004 my portfolio will be higher than it is today." (James Cloonan, chairman, American Associa-tion of Individual Investors)
LOOKING AHEAD:
"Sometimes the market recovery starts early in the recession, sometimes late. On average, in the nine preceding post-war recessions, the S&P 500-stock index hit bottom six months after recession started and five months before it ended." (S&P Outlook).
AFTER SEPTEMBER 11:
"In mid-October, 81 per cent of investors polled said they still planned to invest as they did before the terrorist attacks. It took 19 trading days after Sept. 11 for the S&P 500-stock index to regain its Sept. 10 close. Only 1.2 per cent of total 401(k) plan balances were transferred from stock funds to fixed-income investments during the week of Sept. 17." (Data from Hewitt Associates)
TAX-SAVERS:
"Before year-end, spend down your 'flexible spending account,' says Money magazine. "If you don't incur health-care expenses by Dec. 31, you forfeit any remaining balance. If you're self-employed and want to save, you must establish a Keogh plan by year-end. Check your withholding. Underpaying taxes by more than US$1,000 triggers a penalty."
CASH FOR KIDS:
"If a young person earns money, he or she can put earnings into a Roth IRA," says Kiplinger's Personal Finance magazine. "If a teen stashes US$1,000 a year for five years, starting at age 16, assuming 8 per cent annual growth, the account would be over $200,000 by age 65. At 10 per cent, almost $500,000.''
WALL STREET WATCH:
"Investors are anticipating better times and saying they should own stocks because the tide is turning." (Bill Barker, market strategist, RBC Dain Rauscher)
"The major lesson is patience. There is no way to predict how long a bear market will last. The best way to make money is by accumulating high-quality assets over time." (Better Investing).
"We've had quite a rally since the September lows and then comes the Mideast crisis and the Enron thing. That's what causes profit-taking days." (Michelle Clayman, chief investment officer, New Amsterdam Partners).
"We're running into bouts of profit-taking after a two-month rally. Some days, we just give a little back." (David Memmott, block trading head, Morgan Stanley).
"The economic news is better than expected and it was ignored. Once they get over the missile attacks, investors may look back at better economic news, helping stocks later." (Richard Sichel, chief investment officer, Philadelphia Trust).
"We continue to advise a positive approach; accumulation is in order." (S&P Outlook).
"It's a technical market and fundamentals have yet to come into play. Stocks have discounted terrorist activities and anticipated weaker earnings. Invest in the future, because it will be here tomorrow." (The Pure Fundamentalist).
"Higher interest rates are coming, and that will crush the last vestige of consumer spending. The Great Greenspan Depression is on its way." (Value View Stock Report).
"The market could start a 50 percent advance based on history. A portfolio of stocks bought at mid-term election lows since 1914 has gained 50.2 per cent on average when the market reached its subsequent high in the following pre-election year." (Stock Trader's Almanac 2002).
"Everybody is playing because they think there's going to be a continuing rally and they don't want to be left behind.'' (Ann Miletti, Strong Funds portfolio manager).
