European Stars and Stripes (Newspaper) - May 27, 1992, Darmstadt, Hesse                                The stars and stripes wednesday May 27,1992 Money matter Market does t know which Way to go by Tom Petruno los Angeles times summertime and the living is easy a except of course if you re trying to figure out How to make a Quick Buck in the Stock  Street has been exhibiting More than even its usual share of anxiety and confusion in recent weeks. The Dow Jones Industrial average at 3,386.77 on Friday keeps finding the strength to hit new highs but Little else follows. Most troubling is the Jerky movement of Many key Stock groups. Through april it seemed Clear to Many investors that they should own Auto chemical lumber and other Industrial stocks that would Benefit from an economic recovery. The stocks to sell meanwhile were the biotech drug and food issues that were fading As investor favourites after leading the Market for the last few years or in the Case of some drug and food stocks for the last eight years. So far in May however Wall Street seems much less sure of which Stock groups to Cleave and which to leave a the rally in Many Industrial issues has stalled the Dow indexes gains notwithstanding. Chemical King Dupont for example shot up from 46% at years end to 54% by the end of april. But the Stock has gone nowhere since closing Friday at 52%. Lumber giant Georgia Pacific which soared from 535/s to 67% Between Jan 1 and april 30, has since pulled Back to 64%. A biotech stocks which were massacred in the first four months of the year As investor optimism about the Industry evaporated have staged a comeback. Jimmu nex for example has risen to 31 from 26 on april 30. It traded at 59% on Jan. 1. And Merck the biggest name in drugs zoomed 45/a on Friday closing at 152% a up from 145 at the end of april. Merck Stock will split 3-for-l tuesday and some investors apparently were betting that the Stock will rocket after the split a hence fridays buying if you could count on this change in Market sentiment carrying through the summer the obvious decision would be to stay away from the Industrial stocks and buy the drugs and other beaten Down consumer stocks. But some Wall Streeter say that would be a costly mistake. So Long As the recovery continues any pullback in Industrial stocks should be used As an Opportunity to buy said William Raftery a technical analyst at Smith Barney Harris Upham amp co. In new York. He argues that the Market is Quot probably facing one of its most crucial moments of the last 10  investors who May have been on the verge of committing to Industrial stocks for the recovery have been confused by the markets about face this month and have stepped away Raftery said. But he believes those investors will return to Industrial issues with a vengeance As new signs emerge that the recession is history. Raftery and other like minded bulls figure it this Way if the recent shift away from industrials and Back toward consumer stocks were the Start of something big trading volume should be rocketing As investors leap off one bandwagon and jump aboard the other. Instead new York Stock Exchange volume has been in a steady downward trend since Tate april. Volume hit almost 240 million shares on april 23, but since then Only one trading Day has even exceeded 210 million shares. Fridays volume totalled just 146.6 million shares third slowest of the year As traders left Early for the Long Holiday weekend. Raftery argues that investors Are showing the same hesitation about Industrial stocks that they showed toward drug and food stocks in the Early 1980s a just before those groups began their Long climb skyward. In the Early �?T80s, investors were conditioned to expect rising inflation rising commodity prices and a Strong Dollar because that was the Story of the 70s. All of those trends were bad for consumer stocks slicing into profit margins in the United states and abroad. Once those trends reversed however the consumer companies were positioned to reap Windfall profits. Yet for a Long time into the �?T80s, investors had a Tough time believing the declines in inflation and the Dollar were for real a even As drug and food company profits ballooned and the stocks surged. This time around investors can to fathom How Industrial companies will make much Money in a slow growth Economy Raftery said. Noting the dramatic streamlining of Many Industrial firms since 1989, he is betting the doubters will be proved wrong in a big Way. Paper lumber and chemical companies in particular Quot will be the leaders going into 1993,�?� Raftery predicted. Thomas Broadus who manages the $1.6 billion t. Rowe Price equity income fund in Baltimore is keeping his bets on such Industrial titans As ism and Ford motor  in my a deep rooted problems Broadus said Quot if you re thinking about the next year they re going to be helped by a new product Cycle and by the  the Stock at 91v4 now has rallied from a Low of 81% in april one of the few major Industrial issues to Buck the groups general stall. Likewise Fords recovery continues to impress Broadus. The company a Stock closed Friday at 44%, up from 28 at years  s time for a Spring checkup of your finances by Julius westhe1mer the Baltimore evening Sun every May when i was Little Mother would go through an annual ritual in our Home called a a Spring  grim faced and determined she compulsively emptied and dusted the Kitchen closets scrubbed the dishes took Down the heavy Winter drapes put slipcovers on the Couch and chairs for summer beat the dirt from the carpets and Hung out All of my heavy Wool suits and Coats to air. A son have you bathed recently a recalling that ancient rite of Spring i present 65 years later a 1992 Spring checkup a this one for your Money a shop for the highest insured interest rates for your savings As you would shop for the Best prices for meat or potatoes a have a a a staggered maturity pattern investors guide of cd Bonds Etc., so you re protected whichever Way interest rates go. No matter what your age done to be afraid of some Long maturities. Done to we wish we had bought the 20-year 14% percent Treasury Bonds Back in 1982? a Check your Stock portfolio. If you re Young or Middle aged have at least 50 percent maybe More of High Quality stocks in your list. Over 35 years the Standard amp poor 500 Stock average outperformed government Bonds by 17 to 1. No misprint a make sure that no Stock in your list represents More than 25 percent of your total. If one does Cut Back promptly pay the capital gains tax if any and move on. As in be often said never worry about capital gains taxes worry about losses. A if you re in the 28 percent or Over tax bracket switch some Money from cd government Bonds Etc., to High Quality tax free municipal Bonds. The tax free arithmetic will generally work in your favor. Be sure to Check Bond Call provisions. A when selecting a stockbroker or adviser interview several. Ask to see audited investment results. If results Are poor after two years warn your broker. If results continue bad switch brokers. Its your Money and nobody cares As much about it As you should. A regarding your career decide to put every Nickel you can into pension plans 401 k programs Ira rollovers Etc. The reason Money in retirement plans grows almost twice As rapidly As in your personal account because no taxes bite into growth and income. A if you have sufficient savings pay Down your mortgage Home equity loan and especially non deductible consumer and Auto Loans. Why keep Money working at say 4 percent when you owe Money at 9 or 10 percent and disregard the tax deductibility feature of Home Loans. A if you re a worrier carry insurance on your Safe Deposit Box contents. A Check to see if your homeowners insurance limits Are High enough. A concerning insurance Check your catastrophic Quot umbrella policy for limits. In a not trying to frighten you but court awards Are High these Days and you done to want to pay millions of dollars if for example your Auto brakes fail at a crowded intersection and injuries or fatalities result. A review your will with your attorney. Make sure you re leaving Money assets and property to the right  want to boost mom s retirement by Bill Doyle q my Mother is 45. She started a 401 k retirement plan at work about three years ago. I know that is kind of late but being a single Mother of three with a $16,000 salary has set her Back. Now in a a College graduate doing Well. My two siblings Are about to be College graduates. We want to Start helping our Mother prepare for retirement. We plan to make combined investments of $125 a month for her for the next 20 years. We have been approached about a variable life insurance policy. Is this a Good Way to go if not what do you suggest a its not a bad Way. Its a rather conservative approach and could work out. However there Are tar better methods available. A variable lire policy is similar to an old line whole life insurance Doyle policy in that it provides both Protection a As a death Benefit a and a Cash value savings feature. The Basic difference Between whole life and variable life is How the Cash value is invested. Most variable life policies offer the option of putting that portion of the premiums into a variety or accounts holding stocks Bonds Money Market funds Etc. The policyholder also has the Opportunity to move from one to another. How Large the death Benefit and Cash value become depends on the investment performance of the account chosen. A minimum death Benefit is guaranteed but there is no Assurance on the Cash value. With her three children All doing Well your Mother certainly does not need to have premiums paid for a Large death Benefit. All the Money invested for her should be socked away for her retirement years. My suggestion is to put the $125 per month into a Mutual fund holding common stocks. Although there is risk there such Mutual funds have produced excellent investment results Over the years. Choose a True no Load fund with no commission when shares Are purchased no charge when shares Are redeemed and no infamous 12b-l plan eating away at share value. You three Bright Young people can obtain information about such funds and their investment performance by spending some time Reading financial reference works at a Public Library. I can to Lei this go by without some words of Praise. I  even if i wanted to because in her chore of handling column mail my financial of ulcer put your letter on the top of the pile to be answered and had kudos for your Mother and you. Q a couple of years ago 1 was Laid off from my state Job in Massachusetts and received a Lump sum distribution of my retirement benefits. I paid income tax on that full amount because i was unaware a and the state never informed me a that i could have rolled Over that distribution to keep the Money deferred from income tax. Is there anyway to undo the damage retroactively  the state have advised me of this option a sorry you re stuck. To keep a Lump sum distribution from a qualified retirement plan and future earnings of that Money deferred from income tax you Are required to Roll it Over into an Ira within 60 Days after receiving the Check. If you had done that you would have paid no tax on the Money until you made withdrawals from the Ira which you Are required to Start doing after age 70%. Doyle welcomes written questions but he can provide answers Only through the column. C King features Syndicate inc