Cedar Rapids Gazette, January 3, 1974, Page 9

Cedar Rapids Gazette

January 03, 1974

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Issue date: Thursday, January 3, 1974

Pages available: 32

Previous edition: Wednesday, January 2, 1974

Next edition: Friday, January 4, 1974

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Publication name: Cedar Rapids Gazette

Location: Cedar Rapids, Iowa

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Years available: 1932 - 2016

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All text in the Cedar Rapids Gazette January 3, 1974, Page 9.

Cedar Rapids Gazette (Newspaper) - January 3, 1974, Cedar Rapids, Iowa The Guide By Sam Shulsky </-! intend to retire in n lew months. A broker has suggested I put $10,000 into .'in “A’ rated preferred yielding ti1- percent How would this compare vvitli certificates ol d< posit yielding 7 to Vlu percent which provide interest quarterly and would not entail any brokerage commission? A—Ifs a fair comparison — and there are several factors to be considered. First as to (he savings certificate: Some bani'., and savings and loans iii Hie large financial cen tees are ort cf mg yields, compounded, ashing!) as 7.0 percent. Ibis is for deposits running 4 to 7 years. DDIC and PSMT in airan e is in* force in membei institutions, 'ilicre is, of course, no brokerage charge. T Ii e money may he withdrawn before maturity - but at a penalty. Now as to tile preferreds: The investment, of course, lias no maturity ami there are no guarantees of bow much it would lie worth, if you decided to sell. ll interest rates go down, you might realize a profit lf interest rates rise further, you might have to take a loss. Dividends are paid quarterly. It would cost about $ I tit) to buy 2t)(i shares of a $.01) stock lf you do decide to try for high yield via the preferreds, I’d favor buying a lower coupon issue at a discount from par rather than a high 8'/a or even 9 percent coupon at par or at a premium. The discount preferred leaves some room for stock market profit iii case of a drop iii interest rales. 'Hie premium preferred might be called iii and paid off af. a price below what you pay for it now. ♦ * * (I—I plan to retire next June and will then have to swill Ii to income investments. Over the last decade or so I’ve been buying Is bonds. Some I plan to convert into ll bonds. Others I plan to cash and put into Vk percent savings certificates. What will I have to pay iii taxes? I also have a small bouse! [which I rent out for $ I lf* a Month and should sell for $15,-000. I figure that when the mortgage is paid off I will sell iit and invest the money for 7V2 percent and no headaches. A—Switch your oldest bonds I into ll bonds. They are the ones which have the most accrued j interest and therefore, would cost you the most iii taxes if I you were to cash them By swtiching to ll bonds you may 1 continue to defer the tax on Hie accrued Is bond interest. The most recently purchased Is bonds have the least taxable accrued interest, so they may be cashed with the least tax liability. Of course, it is possible that since most of your income will The Cedar Rapids Gazette: Thurs., Jan. 3, 1974 Sam Shulsky be from social .security you may .rive an tax problem at all. J don’t understand why you feel you must keep that house until it is paid up. Whatever equity you have in it now could be earning 8 percent in high-grade corporate bonds. I can’t see keeping a $15,000 house (mortgaged or not) for a gross return of $1,380 a year (out ol which must come taxes, insurance, water, repairs, etc.) when your money can be earning 8 percent, clear, in high- grade bonds. * * * Q — Please comment on my three funds and tell me whether f i ought to sell out two of them and put all my money mo the Ihirci. 1 A—Thank you for the perfect [example of a question I wouldn’t ; touch here with a 10-foot pole, s Pontificating on the future mar-| kct action of three mutual (funds, and advising a switch from two to a third is my idea I if pure foolhardiness, I Not only haven’t I the slightest idea of what the general [stock market will do over the next six months, year, or six [years- but to come out, black on white, with the advice to I desert Funds A and B in benefit of a bigger stake in Fund C [would .surely be questionable pro Hee—if not leaving myself • open to legal action. * * * Q—-You mention bonds paying 7‘.a percent or so. How do f get I them? A—By buying them at a brokerage firm, just as you would any investment security. (In (some cases, your commercial bank may be able to help you NO CHASSIS tubes to burn OUT-100% SOLID STATE SM-1    n XL 100s    1 with lO0% Solid State No Tubes to I Bum Out ncji M ULEKOFF'S 2’/i acre! of «v«ryl\hing for the fiomt Third Avenue at Rust Street S.E. In Downtown Cedar Rapids \ I Open Tonight ’til 9 p.m. Friday and Saturday 9 a.m. to 5 p.m. Every TV set sold at Smulekoff’s is installed and serviced by Smulekoff’s own factory trained service staff, one of Iowa's largest and best equipped. NEW 1974 Models Presenting the XL-lOOs 100% Solid State With 100% solid state No Tubes to Burn Out 25" diaconal pieta* PAYMENT TERMS BIG Trade-In Allowance Take Your Choice of Styles in RCA Color TV, Stereo, AM Radio All In One Cabinet SMULEKOFF’S f Si M on agr .. i NURI ■ ■ Tonight (Thursday) ’til 9 p.m., Friday and Saturday 9 a.m. to 5 p.m. A fabulous Sale at Smulekoffs, offering outstanding values. Now is the time to give your family the best in TV enjoyment . . . RCA COLOR TV . . . you'll find extra liberal trade-in allowance for your old black and white TV set and an array of cabinet styles from which to choose. Beautiful cabinets, life-like audio and true to life color picture are yours with an RCA COLOR TV. Makes TV enjoyment come alive ... so act now, get COLOR TV enjoyment at rare savings. Come today to Smulekoffs in Downtown Cedar Rapids. Ready For Immediate Delivery Yes, genuine RCA COLOR TV . . . best in the industry ... all new models, yours to choose fcom. Extra Big Trade-In Allowance for your old Black and White TV set. Black Matrix design means Bright Color Pictures, Even in Daylight tor your old Black & White TV ;

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