New Braunfels Herald Zeitung (Newspaper) - April 21, 1985, New Braunfels, Texas
Bond Buyer index
Index of 20 municipal bonds; 20 year maturities, various ratings
9.0 1 8 15 22 1 8 15 22 29 5 12
Fed. March April
Chicago Tribune Charts
Dow Jones average
Money supply [MI]
In billions of dollars
J—I—I—I—I I I I I I I I L_
30 7 14 2128 7 14 21 28 4 11 Jan. Feb. March April
Commodity futures index
Index of weekly closing prices of 27 key commodities; 1967=100
230 1 8 15 22 1 8 15 22 29 5 12
Feb. March April
Source Commodity Research Bureau
3-month Treasury bills
Percent, weekly average interest rate
9.5% -, M *** « •
Aa! J, ±
7.5 1825 1 8 1522 1 8 15 2229411
Jan. Feb. March April
Sunday April 21,1985 SA
Market caught in slump
NEW YORK (AP) — In the midst of stormy activity in the bond and currency markets, the stock market lately has been becalmed.
The dollar has fallen significantly from its early-1985 highs against leading foreign currencies. Interest rates lately have been tumbling in the credit markets.
At the same time, numerous signs of a slowing economy have prompted a heated debate among economists over whether a recession looms.
But while individual issues may respond dramatically to a takeover rumor or a disappointing earnings report, the overall stock market has essentially gone nowhere for several weeks now.
Since early March, the Dow Jones industrial average has been stuck in a narrow range between 1,250 and 1,275. Not since March 19 has the average posted a net change of as much as IO
points in any session.
This noncommittal behavior has variously been interpreted as a sign of uneasiness, confusion or just plain apathy among investors.
Whatever its cause, it has given investment experts some trouble. When nothing much is happening, it is difficult to analyze.
In recent days, the Dow Jones industrial average managed to string together seven straight sessions of gains. But for all its trouble the average rose less than 20 points over that stretch.
At the close on Friday, the widely recognized average of JO blue chips stood at 1,266,56, up .88 from the week before.
Other readings for the week showed the New York Stock Exchange composite index up .36 at 105.00, and the American Stock Exchange market value index up .54 at 231.02.
Big Board volume averaged 91.38 million shares
a day, against 93.33 million the week before.
The market has been beset lately by fears that the peak of the current economic cycle has passed. If a recession were approaching and the market was following its textbook pattern, it should now be — or soon start — declining in anticipation of the negative economic news to come.
But analysts who take an upbeat view of the market’s prospects say some of the key ingredients of a classic top are missing from the current recipe.
At a typical top, they say, interest rates are high and rising, driven upward by a strong but unsustainable demand for money. That is not the case now.
Nor, observers point out, are there many signs of speculative excess in the stock market. ‘We find a conservative, somber mood according to our studies,” reports John Mendelson, analyst at Dean Witter Reynolds Inc,
Report— Coke plans to change formula
ATLANTA (AP) — The 99-year-old, top-secret formula used to make Coca-Cola soon will be changed, according to a report published Saturday.
The new formula was developed in a secret project launched ui January, The Atlanta Journal and The Atlanta Constitution said rn their combined Saturda> edition.
The newspapers, which quoted no sources and said the company would not comment, said a possible reason for the new formula was a drop in Coke’s market-
leading share last year.
Coca-Cola Co. spokesman Carlton Curtis declined comment except to say there would be a news conference Tuesday at which “the most significant soft drink marketing development in the company’s nearly 108-year history w ill be announced."
The current formula, known as • Merchandise 7X.” is frequently described as the best-kept secret in American industry. It was developed by Dr. John Pemberton in 1886.
Mutual funds help smaller investors
By STAN CUNNINGHAM.
Edward D. Jones&Co.
Last week, we began our discussion of professionally managed investments by pointing out there is private professional management and public professional management.
If the amount you have to invest is less than $100,000, you might consider public professional management using the medium, investment company trusts, commonly called mutual funds.
In a sense, the name mutual funds describes the purpose. You’re pooling your resources with others like yourself for your “mutual” benefit. You may have $1,000 to invest. By yourself, you couldn’t get the diversification you require, no could you have your investment receive private professional management. However, assume you could find 999 other people with the same financial goals as yours.
Together, you and your friends — now 1,000 strong with $1 million of investible funds — are big enough and have sufficient assets to
diversify, spread your risk through investments in various companies and industries and hire a professional to select your in
vestments and constantly supervise and monitor their performance.
This manager is responsible for the performance of your investment, and the reporting of its progress or lack of progress to you. You’re turning over your investment to be
professionally managed — in this
case, public professional management.
You should, by all means, choose
the management with the same care you would devote to selecting a private money manager.
Several weeks ago we discussed the selection of an investment adviser. We pointed out reputation should be strongly considered as well as competence, standing in the professional and investment philosophy. Does this philosophy mirror the same goals and objectives you wish to achieve? The same criteria should be applied when selecting a public professional manager.
of the week
Investment Company — a company or trust which uses its capital to invest in other companies. There are two principal types: the closed-end and the open-end, or mutual fund. Shares in closed-end investment companies, some of which are listed on the New York Stock Exchange, are readily transferable in the open market and are bought and sold like other shares. Capitalization of these companies remains the same unless action is taken to change. Open-end
funds are so called because their capitalization isn’t fixed; they issue more shares as people want them.
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