European Stars And Stripes (Newspaper) - February 14, 1988, Darmstadt, Hesse Page 20 the stars and stripes sunday. February 14,1988 investor s guide by Bill Doyte q. You have written about risk in Mutual funds a number of limes. My wife and i hate set up an in thl Meni plan using Mutual fund which you Wem Voidrue against. Our plan is Sampl. Each month $400 in the same Mutual fund and ill lend id item doing this for to least id years. We re in Resl our dividends and capital fulfil distributions we pct that Nur in Doyle vestments will increase by Al least 10 percent a a in l our plan sound a. Better than that it s excellent. You re using a method Long recommended by this column Dollar averaging. The process of investing the same amount of Money in the same Security at fixed intervals. As a result you buy fewer shares when in pcs arc High and More shares a Hon prices arc Low. Your average Cost per share Worts out lower than the average of tie prices you pay. Unless inc Price of the Mutual fund shares you Are buying Goc Inlo a tailspin and never recovers you come uni Way ahead. Another big advantage of Dollar averaging is that it Don away with the Guesswork of trying to out smart or Lime the Market. Think Ofil As ulcer avoidance Medicine. This column does not advise against Mutual funds. Most Mutual funds have been Good Long term investments. However inc warning hns been sounded Here thai there is risk in most Mutual funds. The captions to that Rule Are Money Market Mutual funds where virtually no risk is involved. If you read the prospectus of the Lund in which you arc in vesting Jou will find risk mentioned. \ u cannot be sure of get Ting 10 percent each and every year. I d lie doing a disservice to readers if i did not Point out the risk Facic of most Mutual funds. All Loo Many fund investors be came aware of risk Only after the values of their shares plunged in the Stock Market crash of oct. 19. Q. 1 hate invested $80,000 in no Load Mutual funds met the past in years. Instead of taking profits and Swilch Lynx to Money Market Mutual funds before the Market took thai ride in a bucket on oct. 19,1 stayed in a trance and did nothing. Now 1 Havre $10,000 Piper Loai. The bucket is still making trips but Al a Dower Speed. My Mutual funds have Good lung term track re cords and i do not need the mom now should 1 sell or bold on for a Market recovery a. You la have to make thai decision yours ctr because this column never gives sell or buy recommendations. However considering your financial Circum stances and inc Long term invest ment performance of your Mutual funds. I d lean toward keeping things As they arc. Assuming you believe As. I do that this nation s Economy is not headed you in cow where in a Han Basket you should Nave Confidence that corporations will continue to Prosper increasing the Market value of stocks and of Mutual funds holding stocks. Don t pick on yourself for fail ing to get Oul of the Market be fore the october crash. Few investors a thai plunge coming. Western credits to East bloc up 57%, banking Survey finds Basel Switzerland a Western Bank lending to Sovil bloc countries has surged since the end of 1984, but further credits will be linked to improvements in their Export performance n study said wednesday. East bloc debt in Western currencies Rose 128 billion from the end of 1984 to last september totalling 177 billion n cur rent Dollar Exchange rates a Survey by the Bank for International settlements said. Part of the 57 percent Rise stemmed from Exchange Rale changes it said. Economic Reform programs launched in several soviet bloc countries have caused a potential policy conflict according to the study included in the lat est Bis quarterly Survey of Western banking developments. The Bis acts Al a Central Bank for Cen trial Bankers in major industrialized countries. Communist Eastern Europe will continue to need credits from Banks in Western countries because internal mexican inflation rate tied to budget deficit Mexico City up inflation could decline to 6 to 7 percent during february if inc mexican government reduces its budget deficit according to it local business Leader. Antonio Del Valle Ruiz president of inc private sector Center for economic studies told reporters tuesday that inflation would decline if the government reduces its s30 billion budget deficit As called for in the anti inflationary eco nomic Solidarity pact signed dec. 15 by president Miguel do la Madrid and Busi Ness labor and agriculture representatives. The 19s7 inflation Rale Rose to 159.2 percent the highest in mexican history. Inflation during the first two weeks of january was 13.5 percent. The factors which contribute to Price hikes Are declining and a gradual decline in inflation is quite Likely Del Valle said. He said the growth in the Money Supply a major cause of inflation fell from 140 percent in november to 122 percent in december. Structural changes which appear to be under Way in several of these economies will require in All likelihood an increase in convertible currencies the Bis said. Bui it said such credits will Only be forthcoming if the financial markets Are persuaded that these policies of structural change arc compatible with improvements in i desc countries external performance much will depend on the Success of the economic reforms economic growth elsewhere and the East West political Cli mate the study said. The soviet bloc s poor Export performance May be expected to improve Only slowly in coming years it said adding that several countries arc facing fragile balance of payments positions and a rising Dollar value of their debt. The area s ratio of debt to exports Rose sharply in 19s5 and 1986. The credit Outlook for Eastern Europe is far from Clear he Bis analysts concluded. Mexico s debt 60 /40 1976 78. Of 82 eat Mateel $100 to i Moor Soi pm or Tain Bric a my an Choc oot Itzuri Row a port a. Western tending Rose partly because Banks were impressed with economic adjustment measures in the soviet bloc in the Early 1930s which together with the rising Dollar helped reduce indebtedness inc study said. Another Factor cited was shortage of credit worthy borrowers. The soviet Union whose credit standing had never been materially impaired benefited most from this favor Able climate the Bis said. Japanese Banks made inroads during the period expanding yen denominated Loans to Hungary and the soviet Union by 11.9 billion. Most cast european debt however is in major european currencies. Japan set a new Milestone in world financial markets during the third Quarter of 1987, Accord ing to the regular Bis Survey. At the end of september outstanding International claims by japanese Banks Al j509 billion for the first Lime exceeded those of . Banks which had i48b billion. Trie expansion was focused on asian markets the Bis said. Retail sales increase 3rd month in a Row Washington a retail sales climbed 0.5 percent in january the third consecutive monthly increase the government said saturday. The Commerce. Department said retail establishments sold j128.i billion Worth of goods in january up $600 million from the december sales level after adjusting for seasonal variations. It was the highest level since August when sales hit j128.9 billion. The january Rise followed revised in creases of 0.3 percent in november and 1.2 percent in december earlier Asti males had put the november increase 01 Only percent and the december climb at 0.7 percent. Much of the january strength came in Auto titles which climbed 1.6 percent fal lowing an increase of 1,9 percent in de Cember. 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