Will Rogers said that it's easy to make money in the stock market: you buy a stock and hold it until it goes up, then sell it. But “if it don't go up, don't buy it.” Towards the…
Abstract
Will Rogers said that it's easy to make money in the stock market: you buy a stock and hold it until it goes up, then sell it. But “if it don't go up, don't buy it.” Towards the end of last year the stock market as measured by the Dow Jones Industrial Average (DJIA) was at an all time high of 2691.49. Investment professionals of all levels of experience and points of view — as well as retail clients — were asking themselves on a daily basis, “how high is up?” On the assumption that the astute readers of this column made their buying decisions in July 1982, when the DJIA was languishing around 750 and before the bull market began its surge on August 13, 1982, we will consider the sell decision.
For the past two years, this column has concerned itself with descriptions of specific types of investments and their suitability for various individual situations. Now that all…
Abstract
For the past two years, this column has concerned itself with descriptions of specific types of investments and their suitability for various individual situations. Now that all of you faithful readers have had a chance to discover the range of investment possibilities and we in the financial community have survived the crash of '87, it seems an appropriate time to consider some basic questions that many clients have asked themselves and their brokers: Why bother? Why reinvest now? Why not just buy worry‐free savings certificates?
Zero‐coupon bonds have attracted a great deal of investor interest and generated a great deal of investor confusion. This article will attempt to clear up the confusion, validate…
Abstract
Zero‐coupon bonds have attracted a great deal of investor interest and generated a great deal of investor confusion. This article will attempt to clear up the confusion, validate the investor interest, and provide enough information so that the reader can decide whether the investment is appropriate.
We've all heard the standard simplistic advice about stock market success: “Buy low, and sell high.” The opportunity to take this advice once again presented itself to investors…
Abstract
We've all heard the standard simplistic advice about stock market success: “Buy low, and sell high.” The opportunity to take this advice once again presented itself to investors when the market dropped more than 500 points in October 1987.
Have you ever wondered how Agatha Christie's Miss Marple managed to live her quaint life in the quiet little village of St. Mary Mead without visible means of support? The source…
Abstract
Have you ever wondered how Agatha Christie's Miss Marple managed to live her quaint life in the quiet little village of St. Mary Mead without visible means of support? The source of her “small fixed income” was a financial resource which has kept many a fictional British character in “tolerable circumstances”—the annuity. While literature often mentions annuities in passing, they have only recently received attention from the financial press. The 1986 Tax Reform Act has left annuities and life insurance among the few untouched tax shelters, and the insurance industry is responding to this opportunity by expanding its product lines, and by emphasizing the tax benefits of single‐premium and whole‐life policies and annuities.
Two of the most frequently asked questions in my “Introduction to Investments” classes at Brown University's adult education division are: How do I find a broker and how much…
Abstract
Two of the most frequently asked questions in my “Introduction to Investments” classes at Brown University's adult education division are: How do I find a broker and how much money do I need to start investing? Two other questions which are not asked but should be are: How do you work with a broker and how can you evaluate a broker? The first two items are central concerns for a new investor, and the latter two are also relevant to the more experienced investor who may be dissatisfied with, or at least confused about, the nature of a new brokerage relationship.
The possibility of new titles by other publishers entering the journals marketplace defines an upper limit on journal prices. An extraordinary high price (with little difference…
Abstract
The possibility of new titles by other publishers entering the journals marketplace defines an upper limit on journal prices. An extraordinary high price (with little difference in production cost) should signal the existence of a market opportunity to other publishers. To be successful, the new title must attract sales away from other titles. The editorial policies, and so the content, play an important role. Price should play a role as well. If, in fact, some high‐priced journals are earning their owners extraordinary profits, we should expect university presses, professional associations, and other commercial publishers to produce new titles or manuever existing titles into closer price competition.
This spring (May, 1989) I was alarmed to read, in a trade publication for stock brokers, an article recommending real estate limited partnerships to brokers and their clients. The…
Abstract
This spring (May, 1989) I was alarmed to read, in a trade publication for stock brokers, an article recommending real estate limited partnerships to brokers and their clients. The same week I had received a report on my own real estate partnership which contained the following statement, “Due to the operating deficits of… and the imminent foreclosure of the…, it is questionable as to whether the partnership will be able to fully realize all its invested capital.” Which means (translated into direct and grammatical English) you probably won't get back all of your money, much less the seven percent annualized tax‐sheltered return which had disappeared two years ago. Shortly thereafter the Wall Street Journal ran a story on the same topic under the headline, “Shearson seeks to Control Damage From Troubled Partnerships.” If it's not too late, I would like to educate you, faithful readers, and hopefully spare you one of my own follies.
Around my office, I am jokingly referred to as “Miss Utility” because of my advocacy of utility stocks as investments suitable for everyone's portfolio regardless of age, income…
Abstract
Around my office, I am jokingly referred to as “Miss Utility” because of my advocacy of utility stocks as investments suitable for everyone's portfolio regardless of age, income, employment status or long‐range financial goals.
When my daughter was an infant, I took out a $10,000 whole‐life insurance policy on myself. Seventeen years later I canceled the policy and received less cash than I would have…
Abstract
When my daughter was an infant, I took out a $10,000 whole‐life insurance policy on myself. Seventeen years later I canceled the policy and received less cash than I would have had I stuffed the money under the mattress. This illustration is an example of why insurance has always been considered a poor investment. On the other hand, had I died, my family would have received $10,000 for its $100 annual premium and would have benefitted financially.