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View Sample Pages : New Braunfels Herald Zeitung, November 18, 1984

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New Braunfels Herald Zeitung (Newspaper) - November 18, 1984, New Braunfels, Texas Bond Buyer Index Index of 20 municipal bonds; 20 year maturities, various ratings 115%    “ 11.0 — 100 ..........L_ ' 9 5    2431 7 14 2128 5 121926 2 9 Aug. Sept. Oct. Nov. Chicago Tribune Charts by Terry Volpp Dow Jones average — 30 Industrials —— 1280 Sept Oct.    Nov. Money supply [MI] In billions of dollars    R    =    Revised $555 550 545 -1—i—i—i—i—i—i i i—i— 540    13    20    27    4    11    18    25    1    8    15    22 Sept Oct    Nov Commodity futures index Index of weekly closing prices of 27 key commodities; 1967 100 Weekly 270    1984 265 260 255 — 250 245 .......a.......a____l_____i......j.____l. 240    5    12    19    26    2    9    16    23    30    7    14    21 Oct. Nov    Dec Source Commodity Research Bureau 3-month Treasury bills Percent weekly average interest rate 11 0% Sept Oct    Nov Bu si ness Herald-Zeitung Sunday, November 18, 1984 5A Market suspect of tax reform NKW YORK (AP) - Wall Streeters are decidedly wary as they look ahead to the possibility of “tax reform’’ measures next year. Analysts in the financial world, like everybody else who has been paying attention, are mindful of President Reagan’s repeated assertion that Americans' income taxes aren't going to be increased. “Nonetheless, tax reform, and a likely increase in the share of income taken by government, seems inevitable,” observed Ian McAvity, a Toronto-based investment adviser, in a recent commentary. 'With the 1986 midterm elections already in view for Republican senators, any tax changes are likely to be made quickly to bury Diem as political issues then," he added One possibility that has been mentioned is putting a greater tax burden on corporations. That might not sit well with stock-market investors, since it would stand to reduce the amount of corporate income available for dividends or reinvestment in the business Amid uncertainty over the prospective shape of the administration’s tax proposal, the stock market took a tumble in sluggish trading this past week. The Dow Jones average of 30 industrials dropped 31.03 to 1.187.94. The New York Stock Exchange composite index fell 2.03 to 94.70. and the American Stock Exchange market value index was down 2.79 at 209.18. Rig Board volume averaged 72.80 million shares a day, dow n from 93.80 million the week before. Even if the Reagan administration is able to realize its stated goal of simplifying the tax system in a “revenue-neutral” way, investment experts see some potential perils for the markets. Consider, for instance, the widely discussed idea of a “modified flat tax” setup. Under such an arrangement, the present multitiered system would be replaced with just a few tax brackets. Nominal tax rates probably would be lowered for most Americans, while most, or at least many, existing deductions would be eliminated. Analysts point out that any tax-reform measure that substantially lowered tax rates might well have some significant side effects. The Value Line Investment Survey notes that it would reduce the value of those deductions that survived by putting investors in lower brackets. “We have in mind, of course, the deductions associated with so-called tax shelters,” the investment advisory serv ice said. “Municipal bonds would also be affected, with yields rising land prices falling) relative to those on taxable bonds, so as to maintain the same relationship in after-tax yields.” Bond market-watchers say prices of municipals have already begun to reflect this possibility, in case it becomes a reality. Furthermore, Value Line says, stocks and all other investments subject to favorable long-term capital gains treatment would also logically suffer some loss of luster. The benefits of the 60 percent ex clusion from taxes that applies to such gains diminish in lower tax brackets. “It’s still far too early to base investment decisions on the possibility of lower tax rates,” Value Line concludes. “But investors should; keep an eye on the administration's' tax proposals as the> develop.” Financial focusBusiness mirror Growth stocks offer reward By STAN CUNNINGHAM Edward D JonesbCo First we must satisfy ourselves as to w hat a grow th stock is and generally what we should expect from it Once done, we are in a better position to determine if this is our cup of tea. Growth stocks are not for everyone There are certain groups who should strongly consider growth-oriented investments as part of their investment program. I^et’s discuss a sampling of these groups. Young, single people In this category we normally find people starting a career. As a rule they will have few obligations except to themselves. Once they have budgeted for expenses to meet their needs and find themselves with suplus capital, growth investments are most oftened considered Prudently selected growth stocks cannot be classified as gambling but as we pointed out they do carry a considered risk element that hopefully will yield a profitable capital gain. The greater the risk, the greater the risk, the greater the reward possibility should be. I like to refer to this as my “nsk-reward ratio.” Young, single people will normally consider themselves in a better position to take this risk with the hope of being amply rewarded. If they lose, it is probably money they would have spent on nonproductive entertainment in the first place. Thus growth investments are well suited for this group of investors. Young, married couples In this day of runaway inflation most young married couples would confront me with the argument that they have no extra capital. However, it is my experience that most young couples who come to me for assistance in financial planning do have surplus funds if they budget properly. Many are pitifully under-insured and paying premiums they can’t afford. By selecting the proper insurance program they can usually come up with extra investable dollars without having to add more to thtur investment program. These extra dollars are ideal to place in growth securities on a regular basis- My wife and I were discussing how nice it would have been if twenty years ago I would have budgeted just $50 per month — $600 per year — into an investment which just averaged 6 percent total return per year. Today, that investment would be worth $23,000 The fact is, that most long term growth investments have done much better than that. If that same $50 per month had compounded at a rate of 12 percent per year, it would have grown today in value approaching $48,000. You can see the benefits of systematic investing for married couples. True, there is an element of risk in growth investments but likewise there is present possibility of reward. In the above case, a portion of $50 a month could have been lost. Had this been the case I suspect it would not have affected the life style of the family in the least. That was the risk factor. The reward speaks for itself. __ Briefly Miller opens weaving studio Lucille Miller has opened a studio, specializing in custom weaving and stitchery, on the second level in Denson’s specialty store at landmark Square. Miller has had her work shown and sold in galleries, stores and museums throughout the Southwest. Her creations range from wall tapestries to rugs and stoles. She has scheduled some classes for Janurary and February. Trans World Airlines promotes Chapa Trans-World Airlines has promoted Kevin Chapa, son of Mr. and Mrs. Frank Chapa in New Braunfels, to account representative in Tulsa, Okla Chapa has been employed by TWA for six months in San Antonio as a customs service agent. Sweden wants to expand freeze of investments STOCKHOLM. Sweden (AP) -Over a storm of protest from Swedish businesses, Prime Minister Olof Palme’s government wants to expand a freeze on investments in South Africa that Sweden imposed five years ago as an “example to the world." Critics argue that the world has ignored Sweden’s example and thus the freeze punishes only Swedish industry and not South Africa’s white-ruled government for its apartheid system of racial segregation. But Palme’s government presented a bill to Parliament earlier this month that would extend the law to cover leasing arrangements by which Swedish companies have skirted the ban on new investments in South Africa. The Social Democratic government wants current operations of Swedish companies to “hibernate” in South Africa without expanding, “until conditions have changed.” And the government softened part of the proposal from a hotly debated government report issued in June that wanted exemptions offered under the investment ban reconsidered by 1990 The bill maintains the right of exemption for in vestments necessary to replace worn out equipment. The June report also acknowledged that the economic impact of onl> a Swedish freeze is negligible Leading the drive against tightening the law, the Swedish Federation of Industries not univ rejected the idea but advocated abolisarguments bv emphasizing Sweden’s moral indignation against the oppression of 22 million blacks bv 5 million whites in South Africa The June report said that the human rights situation has not improved and that there appears to be no official plan to improve it Sweden’s unilateral investment freeze and actions in the United Nations comprise what it calls an “isolate South Africa policy " But there are frequent reports of flaws in the effort. A serious flaw was revealed bv the Texas Commerce produces quarter earnings Texas Commerce Bancshares, Inc. produced third quarter earnings per share of $1.43, a 4 percent increase over the amount earned the same quarter in 1983. This represents the 64th consecutive quarterly year-to-year increase in earnings per share, a record matched by only five other New York Stock Exchange listed corporations. DR. RICHARD VEGLIA PODIATRIST FOOT SPECIALIST MEDICARE/MEDICAID HOUSECALLS BY APPOINTMENT EVENING APPOINTMENTS AVAILABLE !000 N. WALNUT Suite D (Next to Now Braunfels National Bank) 629-3101 government's Central Bureau of Statistics just after the June report was published. Bureau figures showed that exports to South Africa almost doubled during the first half of 1**84. making it Sweden's largest export market in Africa "I hack the foil lily insurance I sell with gixxJ neighbor service. Call inc " DICH HOEGH Agent 8?? N Walnut New Braunfels T#*a$ 78130 Oft.: (512) 625-6081 Like a good neighbor State Farm is there ^a STAT! FARM INSURANCi Slate Farm Insurance Companies Home Offices Bloomington Illinois Money supply IMI Producer Price- Index ',rln billions of dollars ct    198311984 How the 1984 tax bill affects employee benefits Individual retirement accounts: □ Eases rules for rolling over pension or profit-sharing money into IRAs Q Sets April 15 as the deadline for contributing to regular IRAs Cafeteria-styie benefit plans: □ Confirms use-it-or-lose it provision for flexible spending accounts □ Requires employees to choose benefits in advance □ Gives companies until Jan. 1, in some cases until next April, to get plans into compliance □ Confirms that employees can pay their share of costs via pretax dollars Golden parachutes: □ Defines ‘ excess compensation for departing executives □ Requires company and recipient to pay taxes on the excess’ Group term life insurance: □ Sets $50,000 as limit company can provide retirees and still get tax deduction □ Makes retiree liable for taxes on insurance above $50,000 Voluntary employee beneficiary associations: □Sets limits on amount companies can put into VEBAs to fund benefits Chicago Tribune Graphic Source Coopers & I y tx a ne ;