European Stars and Stripes (Newspaper) - December 15, 1985, Darmstadt, Hesse                                Sunday december 15, 1985 the stars and stripes Page 19 business news retirement of shares ignites Market Boom by John Cliniff a business analyst new York a when Loo much Money chases too few goods you my be sure that prices will Rise. This is inc Way of the marketplace and unless the Law of Supply and demand is repealed this is the Way it always will be. The theory is now being applied to the Stock Market in an attempt in understand Why the popular averages Are at record highs while the outlet Xii for the Economy supposedly foretold by the Market is less than robust. The shortage if it can be called that is resulting mainly from the retirement of shares outstanding because of mergers acquisitions and leveraged buyouts and the clowning with Clowny How much fun can a color stick be that s what these researchers from the in Iirth factory in Hialeah Fla want to find out. Clowny a new toy produces Rainbow colors with one stroke. The toy called the most innovative since the invention of the Crayon has just been introduced to the $ 133 billion toy Market. Repurchase of shares by other com panics sonic of the latter Are buying up their own Stock simply because they think it is a Good buy and they should know. Hut others arc repurchasing shares to keep hem out of the hands of those who might launch a takeover attempt. Whatever the reason a lot of Stock has disappeared from the marketplace. Citing a cd Cral Reserve reports. Wright investors service a Large advisory and portfolio management company estimates that 573 billion in shares were retired in 1 k4. And that the Pace is at least the same this year. If so says John Wright the net share retirements in 1984 and 19x5 would More than offset s142 billion in net new Slock issued in the prior 15  in the 12 months through june 30, he Points out 26 companies have been removed from the Standard & poor s 500-Stock Index be cause of mergers. Wright also Calls attention to the fact that after expanding at a 2 percent annual Rale for four decades the number of stocks listed on the new York Stock Exchange Hus declined Over the past 10 years. Merrill Lynch offers further evidence. By the end of the year estimates Carmine Grigoli vice president of Merrill Lynch capital markets $146 billion in Slock will have been taken from circulation in two years an amount equal to 9 percent of outstanding equity. As the Supply shrinks Yale Hirsch publisher of the investment letter smart Money maintains that demand is rising like the Ocean under a  Moon. A Green tide is about to engulf Wall Street he says. The Green tide is Money an incredible si75 billion of buying Power from a num Ber of sources that Over the past decade got used to earning double digit returns on Money they Lent out and Are my dissatisfied by declining yields. These investors says Hirsch. Are reads to switch to equities shares in an attempt to Salsify their appetite it s dawning on them he says thai this could be one of the grandest Bull markets of them  where is this investment  is it made up of of Ira and Keogh accounts pensions profit sharing plans Money Market and Mutual funds Money under management proceeds from capital gains surplus per Sonal income corporate Cash flows inheritances foreign Money. He agrees that Only a percentage of the Money in these categories will head to the Stock Market but he says he has taken that into account. If. For example the Stock Market obtains just 25 percent of the $244 billion invested in Money Market funds and tax free Short term municipal Bonds it will have $61 billion of additional support. With Money Market accounts paying Only 7.2 percent and the Bonds Only 4.5 percent albeit lax free investors won l sit on i hair assets he says. Instead Many will put their Money into a relatively holler Slock Market. Five persons indicted As result of March collapse of Ohio Bank Cincinnati up1 the former owner of a Bank that collapsed and set off the Ohio banking crisis last March was indicted Friday on 50 counts of theft by deception securities violations and wilful misapplication of funds. Marvin Warner was indicted on one count of theft by deception four counts of securities violations and 45 counts of wilful misapplication of funds. Also indic cd were two former presidents of Home state David Schiebel and Burton Bongard and two est officials. Ronnie Elon and George Mead. The special slate grand jury was Emp an eled by Ohio attorney general Anthony Cylc Braz a on sept. 3 to investigate the collapse of the Home slate savings Bank and the subsequent run that forced gov. Richard Celeste to temporarily close 70 savings and loan institutions. Schiebel was charged with 44 counts of wilful misapplication of funds five counts of securities violations and one of in Cal by deception. Bongard was indicted on 44 counts of wilful misapplication of funds. Elon was indicted on 40 counts of Aid ing and abetting wilful misapplication of funds. 12 counts of theft by deception and four counts of obstruction of Justice. Mead was indicted on 10 counts of theft by deception and one count of obstruction. Investor s guide by William Doyle o. A while Back when interest Rales were higher than they Are now i put $10,000 into a five year Bank certificate of Deposit. The cd pays 11.25 percent inter est and compounding brings the effective annual yield up to 12.08 percent. I hate a couple of thousand dollars More in a Money Market Deposit account at the same Bank at Ower interest of course. Recently talking loan officer there i found out my cd has a feature allowing me to put More Money into that cd any time before it matures and receive the 12.08 percent. Is there any reason i should t move what i have in the Myda account into that cd a none Al All if you re Able to lock away that Money until the cd matures and if you have All the facts Aboul thai cd nailed Down so that you completely understand while your Cash is in the Myda you can withdraw it at any Lime and even write up to three checks a month on that account. If you Transfer that Money to the cd and want to take it out you la be hit with an Early withdrawal penalty. You should keep some Money in the Myda for ready Access and emergency purposes. Arrangements allowing you to add Money to cd and act the yields established at the time the cd were opened arc relatively rare. They Are promoted with cutesy names such As add on and add anlage lds. Most Banks and savings and loan associations that offered such cd a few years ago stopped when interest rates started to head downward. After All no Bank or so is anxious to pay High interest now that rates arc lower. Because you have that Type of cd. You would be foolish not to add your spare Cash to it. Other readers would be Wise to ask at their Banks and a is. To find out if their cd offer similar deals. However before putting extra Money into your cd make sure you know everything about it. Some add on cd require minimum additional deposits such As ,000. Others extend the maturity of the cd from the dates of the added deposits. And there can be other wrinkles which can vary from one Bank or a l to another. Get All the details from your Bank. Then make your decision. Q. After 10 years with my former employer i changed jobs and received a $5,700 Lump sum distribution from my former company s pension plan. I made no contribution to the plan so i could Roll this Money into an individual retirement account. I have $1,600 in my regular Ira which yields 12.08 percent. Should the $5,700 be rolled Over into that account i am thinking of using this Money toward a future Down payment Ori a House. I am single 36, head of household with a teen Ager in High school. I make $12,000 a year and have $1,000 in other savings. A. First off i have to say you re a wonder for Man aging on your Low income. Congratulations. Were in not for the fact that you want to use the s5.700 As part of a House Down payment inc natural advice would be to Roll it Over into your Ira. There in and the Money it earns would be sheltered from income lax until you take it out. But if you withdraw Money from an Ira before age 59w unless you become permanently disable you pay regular income tax and a 10 percent penalty lax. Based on inc information you provide you probably would have to leave Hal Money in the Ira for about seven years before the deferred taxation and compounding of earn Ings would offset the lax you would pay by taking in out. Considering your Overall financial situation. I d say your Best move would be to put the $5,700 in a cd due to mature about inc time you Hope to buy a House. Q. My husband and i recently purchased a $50.000 cd at our Bank. The lady told my husband to sign the necessary papers and also asked for his social Security number. When i asked her if she wanted my is number and if i should sign she said in was not necessary. Is this proper procedure the cd is in both our names. When we opened our savings account at the same Bank they required both our signatures and is numbers. A. It s of. Only one is number is needed for tax reporting purposes. The Bank already has your signature on file. King feature cum nil Doyle Welcome write can provide an Iwert Only through lie column you can care of the Stan and Stripe. Apo 09211. U s Force