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Cedar Rapids Gazette (Newspaper) - April 16, 1974, Cedar Rapids, Iowa 2 The Cedar Rapids Gazette: Tues., April 16. 1974 The Investor's Guide By Sam Shulsky Q—We roo a successful business with substantial sums in banks which add to our tax burden. My husband feels he wants the money available. so we can’t consider municipal bonds with long maturities What to do0 A—You've answered your own question: Put money into short-term municipal bonds. Any brokerage house list of tax-exempt bonds will include bonds due in 1974, 1975, etc . etc. If you stick to high grade issues there can be little doubt that you will get your money back at maturity. And even if you have to sell out before maturity, the nearby maturity date will limit market price fluctuations to negligible amounts. * * * Q—Would you say that it is always best for a young family to pay off a mortgage due on their home? A — I don’t think you can make a flat statement which would apply to all cases 1 — If mortgage interest plus amortization comes to a figure which is raising havoc with the family’s monthly budget, and the money to clear up the mortgage is available, I suppose life would be more enjoyable if the mortgage were eliminated (The same reasoning also applies to retirement financing ) 2 — But if the interest rate is low — 5 or 6 percent, for example — and the total monthly mortgage bill is not too rough on the budget, there is no reason to rush the repayment of 5 or 6 percent loans, certainly not when money can earn 8 percent, plus, from top quality bonds, or when a young couple should consider growth stocks for their future. Sam Shulsky Q—We have cash and considerable E bonds. I suppose we should cash the Fs and buy some stock, but the tax on the accrued interest would be high A—Why not let the Es remain as is0 They represent a readily available cash fund, tax-deferred until you do use it. Use some of the taxable savings to begin acquiring commons * * * Q—I’m primarily interested in railroad, utility, industrial bunds. VV hat services are there covering these fields? Why don't corporations send annual or periodic reports to bondholders as well as to shareholders9 A—Standard and Poors, Pitch and Moody all issue bond service manuals which should be of great help to bond investors Shareholders are part owners of the business and therefore rate reports answering the question: “How are we doing?" Bondholders are creditors. Still I don’t six' why they should be completely ignored. I think any company will send you an annual statement if you request it * * • Q—I have had a mutual fund for a few years and watched it drop in price. I’m told another fund is doing much better .Should I switch? They'll Do It Every Time AMP MOW AYERWYCK CLAVICOR TD INTERPRET THE SENATORS^ SPEECH ggU SSS**- But how is HE AT CLEAR i MG DP FAMILY POWWOWS? WHILE THE SENATOR SAID ^ HE MOU UP SUPPORT THE ANTI* TRUSS SILU IT POES NOT MEAN HE 6 FOR MEPlCAIP ANP I HAP LUNCH WITH VOUK SISTER, SHE ASK EP IF I WANTEP A PRINK? WHAT PIP SHE 44 ■ A kl av/ HOH? HOW ShOULP I KNOW? OUST SEINO POLITE " PONT ASK MS// A—The term “mutual fund’’ covers a lot of ground. Funds are aimed at "far out." aggressive growth; at a combination of growth and income (and that alone can cover a wide spectrum); or at income. The fund you’ve held is a growth fund — and growth funds have been having a rough time of it in recent years. The second fund is aimed primarily at income. which is a totally different picture. Income stocks have not suffered as much decline as have those which sold at high price earning ratios and have yielded only I or 2 percent. So the answer to your query is not Fund A vs. Fund B — but what do you want your money doing for you? If income is your goal, you should switch to the second fund. If you are still looking for growth you should stay with the first and hope for better market days. * * * Q—I see bonds yielding IO percent and others yielding much less I presume the latter is true because the maturity is close by. Can I get 111 percent without risk9 A—I can’t underwrite your assumption Generally, one tnple-A bond will yield as much as another. There may he slight variations according to maturity — but not, for example, as wide a difference as between the current 8 percent plus offered by top quality corporates and the IO percent you mention There is some market risk in almost every bond and you must assume that one which pays IO percent is riskier than one paying 8 percent. The bond market is an extreme, extremely sophisticated, and mostly, a professional market. Sentiment and mob psychology, which can (and do) play such important roles in influencing common stock prices, have very little if any effect on bond prices. So if you find a bond yielding IO percent or 12 percent you must assume that the experts know about it. too, and are not willing to bid its price up to the point where its yield will be in line with that of low-risk bonds. As the old Grape-Nuts ad used to say: “There’s a reason.’’ Mr Shuishv welcomes written acies lions, bu* he will be able to provide answers only through the column For information on corporate and ta* exempt bonds, please include a self addressed stomped envelope Address your reauest fo Sam Shulsky, care of The Gazette C.R. Drug Numbers To report o violation.-Michael Dooley 377*8081 lf you need help Foundation ll... 362-21 74 » (4 p m to midnight) People like you like Bishops Busy? You can grab a bite and be on your way. Or, if you’re ready to relax . . . well . . . you can do that, too. Service, a warm and pleasant atmosphere and a wide selection of delicious foods are reasons why Bishops is a place people like. People like you. YOU’LL FIND WE’RE JUST A LITTLE jjtihop I'4CAFETERIA 321 First Ave. S E. BUFFET 4444 First Ave. N.E. Conservation Unit Affirms Development of Wakema Park Big George! Virgil Partch By Kevin Kane An 11-year-old controversy over Wakema park reared its head again Monday night as 20 persons showed up at the normally sparsely-attended Linn county conservation board meeting at the county fairground in Central City. Board members, after defending the park agreement with the town of Center Point and reviewing priorities for the long-overdue project, ordered further cost studies to be presented at the next (May 20) regular meeting. The board also tabled further action until the next meeting on its proposed uinter-summer sports complex for Squaw Creek park, voted to seek court action to retrieve missing county park tables, and okayed funding for road oiling and several equipment purchases. More Controversy And, if the Wakema project hadn’t sparked enough debate at the 3l£-hour meeting, the board reawakened another controversy with a long discussion whether County Conservation Director George Hamilton had the proper authority to speak for the board at a May, 1973, hearing on the Duane Arnold Nuclear Energy Center. Hassle on the Wakema park issue was ended—at least for Monday night—when the board unanimously approved Ken Marsh’s motion directing Hamilton to prepare definite project proposals for a fireplace and kitchen at Wakema and to "further explore and report on" the feasibility of constructing a lagoon and cement tennis courts in the park. Primary controversy over Wakema park centers around the fact that the park lies within the corporate limits of Center Point, although the board obtained a 99-year lease on the land in 1962. The board signed a mutual agreement with Center Point the following year in which the city was to provide various utilities, police protection and summer supervision and the conservation board wasx to provide certain improvements within five years. Objectors, including those at the meeting Monday night, claim the board cannot spend county funds on land which it does not own and therefore should terminate the contract. Stipulation Board members, on the other hand, maintain that the agreement is valid under a 1963 decision by then-Atty. Gen. Evan Hultman and they are therefore obligated to carry out the contract as funds become available. The 1963 contract contains a stipulation that the agreement is conditional on both Center Point and the board “having available and sufficient funds and authority to expend same.” Baird King summed up most board members’ comments when he said, “The hoard has already tabled the project 1ft years. Do you keep a contract or don’t you? The board has given its word.” Board President William Cooper, although admitting personal reservations over the project, agreed with King that even though no one on the present board made the agreement "we have to live with it.” One of the primary objectors, Linn County Property Taxpayers' Assn. President L. W. Hamilton of Cedar Rapids, saw things differently. “We’re not against parks, but against the way this one’s being handled by using county funds to improve land within a city,” he told The Gazette. “Just because they leased the property doesn't mean a thing. We want a legal opinion from the present attorney general.” Director Hamilton gave the board a full proposal totaling ‘‘All right, I give up.” $78,500—or $28,000 above the amount budgeted by the county supervisors—for the Squaw (’reek project. The Hamilton authority question, after long discussion, seemed about solved when an Iowa Electric representative pointed out that the 1973 hearing was merely a re-opening of an earlier construction hearing on the Palo plant — a policy subject for which Hamilton had authority to represent the board. However, new avenues of discussion were quickly opened up as one objector — George Tresnak of Cedar Rapids — jumped up to criticize the board for allegedly not soliciting public opinion and "doing its homework" before taking a favorable stand on the Palo power plant One of these closer to you bankers helped a young lady buy a new car A Closer to You Banker helped a father and his daughter arrange for an auto loan, so that the young lady would have transportation to and from her new job. A young couple faced with the medical expenses of having a new baby, explained their need for extra money to a Closer to You Banker. He helped them obtain a low cost bank loan and worked out a repayment schedule to fit their budget. Bankers like Earl Caywood, Steve Allison and Bob Leinart become closer to you because they make a personal effort to know and understand your needs and goals. Visit with a Closer to You Banker about your financial needs. He will make it easier and more pleasant for you to obtain extra cash when you need it. Your “one-stop” Financial Center AND TRUST COMPANY CLOSER TO YOU §§ Peoples Downtown • Peoples last at Town and Country • Peoples West at Mays City • Peoples In Newhall Member EDIC ;

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