How Would You
Invest $10,000
in the Coming Year?
How Would You
Invest $10,000
in the Coming Year?
by Andrew Leckey
Wall Street Report
I ask that hypothetical question of a diverse group
of experts each year. As we enter 1998, the irregular pattern of hundred-point
jumps and tumbles throughout 1997 weighs heavily on many minds. That's turned
the general mood defensive.
Here's how our experts would handle that 10 grand this time around:
Louis Navellier, editor of the MPT Review investment
letter:
"All $10,000 would go into my lowest-risk stocks. These are Herman
Miller in office furniture; Airborne Freight, which is stealing
some UPS business; and Central Newspapers, which owns newspapers
in Indianapolis and Phoenix. Each stock has a history of positive earnings
surprises. Stay away from stocks with volatile earnings. I wouldn't put
money into bonds because, if the economy gets stronger, interest rates go
right back up again."
Catherine Voss Sanders, publisher of the Morningstar
Investor newsletter:
"Due to market volatility, I'd put $5,000 in a defensive fund such
as UAM FPA Crescent Fund (Boston), which seeks value in stocks, convertibles
and bonds. The other $5,000 would go in Masters' Select Equity Fund
(Kansas City, MO), a 'fund of funds' that includes in its portfolio well-managed
funds such as Davis New York Venture, Harbor Capital Appreciation
and Brandywine. Though I wouldn't run screaming from equities, it's
not foolish to be cautious."
Marshall Acuff, investment strategist with Smith Barney:
"Put $4,500 in long-term Treasury bond because stock market returns
will just be single digits. Put $5,500 in companies that are proven leaders,
such as Automatic Data Processing in payroll processing, Medtronic
Inc. in heart pacemakers and diverse General Electric. I don't
expect the bull market to end next year, but I see profit growth down to
something like 5 percent the next five years."
Richard Rojeck, president of International Association
for Financial Planning, and financial planner with CIGNA Financial Advisors,
La Jolla, CA.:
"After paying off consumer debt and putting aside three months
of cash reserves, put $7,500 in a domestic stock mutual fund such as American
Century Value Fund (Kansas City, MO). Another $2,500 would go into T.
Rowe Price International Stock Fund (Baltimore). I expect a volatile
1998, but, because of so many positive economic fundamentals, I see no significant
market problems."
Eric Kobren, president of Insight Management Inc. and
Kobren Insight Funds:
"I'd think about investing in a really nice vacation in Europe!
Seriously, I'd put $3,000 into Oakmark Select Fund (Chicago), which
emphasizes value; another $3,000 into Janus Twenty Fund (Denver),
a large-cap fund; and another $3,000 into value-oriented Baron Small-Cap
Fund (New York). The final $1,000 would go into Montgomery Emerging
Markets Fund (San Francisco). I wouldn't expect as big gains next year,
since Asian problems could slow our economy half a percentage point."
Joseph Granville, editor of the Granville Market
Letter:
"Since I believe the Dow Jones industrial average is heading sharply
higher the next two years, all $10,000 would go into an index fund investing
in the Dow stocks. I don't expect to be taking profits until the Dow sees
10,000, which isn't far away. Then there will be a pullback by mid-1998
to 8,500, before a 'superlaunch' to 14,000 by the end of the decade. I like
stock-split candidates, with 3M and Merrill Lynch my current favorites."
Ed Yardeni, chief economist with Deutsche Morgan Grenfell:
"Take a defensive posture with $5,000 in stocks that include regional
telephone companies; energy companies; multinational consumer non-durable
companies such as Coca-Cola, Gillette and drug companies; and, to a lesser
degree, technology firms. Then I'd put $4,000 into 10-year government bonds
or zero-coupon bonds. The Asian crisis is far from over, and will be an
important reason for weaker 1998 profits."
Michael Metz, chief investment strategist with CIBC
Oppenheimer & Co.:
"I'd put $3,000 into a utility stock fund, $3,000 in a health-care
stock fund, $2,000 in a bond fund, and $2,000 in cash for any opportunities,
should the market suffer a significant setback. I see a year of very slow
growth worldwide and flat corporate profits. Preserve capital, rather than
maximize return. Be cautious and skeptical.
Mickey Levy, chief economist with NationsBanc Montgomery
Securities Inc:
"Start with $4,000 in selected stocks of Western European countries
and $4,000 in U.S. equities, with an emphasis on financial and high-tech
firms. Put $2,000 in longer-term zero-coupon bonds, since I expect long-term
bond yields to fall to 5.5 percent next year. The U.S. economy should grow
at a healthy rate, with inflation low and stable."
Copyright 1998 Tribune Media Services, Inc.
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