Cedar Rapids Gazette (Newspaper) - March 22, 1974, Cedar Rapids, Iowa
Carpet Warehouse Sale
(located at I st Street and 5th Avenue S E. next to Central Fire Station)
6 Hours Only
Saturday 10:00 AM TO 4:00 PM
• Part Rolls—Full Rolls-—Remnants at a Savings of 50%
• Room Size—Over Size—Minisize—Remnants selling from 38.00 to 108.00. ALL SALES FINAL!
The Investor s Guide
By Sum Shulsky
Q — I’m a 20-year*old student who accumulated $1,500 through summer jobs. I began trading stocks in 1969. By 1973 I was down to about $800. I’ve now put this money into an A-rated utility stock: yielding 6.7 percent, and hope that an annual market appreciation of 3 percent wil give me a better than 9 percent total improvement every year. Would you say that a dividend reinvestment plan is a good, safe alternative to more aggres sive growth stock investing?
A — On average, it certainly has been over the last few years, although I hesitate to endorse it as the best policy for young investors for generations to come.
Utility stocks — almost by definition — are not the most aggressive of growth stocks, as recent history bears out only too well. And even taking the longer view, you can see that a regu lated industry can’t very well double its earnings overnight. All we know for certain is that utility dividend yields recently have been just about the highest on record. Since you are most likely not subject to heavy income taxes we can assume that pretty much all that 6.7 percent dividend is available for re-investment — which is not a bad deal. For a person in a high income tax bracket, this route might not be too rewarding.
Let’s just say that you are erring on the side of caution — which, for a 20-year-old, is rather refreshing.
By all means continue with
this dividend re-in vestment, pro gram. It is an excellent way to accumulate any stock on a dollar averaging basis — another cautious approach.
However, don’t make this program the be-all and end-all of your investment career. It’s okay to keep building this utility holding via dividend re-investment, but you still have to come to grips with a more aggressive approach in securities far more speculative than the one you now own. Every young man who intends to invest in equities must take some chances in the stock market — even though they may cost him money — if only for their character-building value. Your experiences have evidently pushed you too far right, into the conservative ranks. Come back toward the center a bit.
Finally, let’s put that 9 percent annual improvement figure in its proper perspective. It’s true that 9 percent is about the average rate at which common share investors improved their portfolio over a 50-60 years )eriod (adding annual dividends t o annual average capital gains). However, a young man juilding his fortune is not in the same position as a power boat contender in a measured course contest. You are not trying to achieve any fixed, average rate of progress. In a sense, you’re going for broke — at least while you’re still young enough to take losses in stride.
By Oswald & James Jacoby
In spite of all the violent crime we read about today, the holdup at the bridge table is not only perfectly legal, but it has the approval of all successful players.
vSouth analyzes the opening lead and notes that West has led the danger suit. Any other opening would have given South time
4 Q 7
♦ A K IO 4 WEST EAST
4 A94 4 106532
♦ Q J IO 9 7 *65
♦ 853 ♦ A 9
♦ 76 + Q832
4 K J 8
♦ K J64
♦ J 95
West North East South
Pass 3N.T. Pass Pass
Time enough to think of 9 percent a year when you are 30-40 years older.
* * *
Q — I’m 36, with about $200 a
month to invest, but feel I
haven’t the time to study securi
ties. Should I go into a mutual?
A — You’ve answered your own question. If you don’t have time to cultivate your garden, hire a gardener.
* * *
Q — Is it true that when an
exchange-listed corporation splits its stock, the price drops automatically?
A — Any stock (listed, or over the counter) will automatically drop sufficiently to compensate for a stock split. If a $50 stock is split 2 for I, the stock will trade around $25 after the split. If a $90 stock is split 3 for I, the stock will trade for $30 after the split becomes effective.
♦ * *
Q — I’ve just sold some real estate. At 53, am I too old to invest in common stocks? And if I should, in what stocks?
A — Anyone still at work,
with years to go to retirement and interested in building capital .should consider common share investment.
Naturally, at 53 you shouldn’t take the wild chances you would have taken at age 35. So — stick to established, quality situations, unless you have information you trust IOO percent on more speculative ventures. I’m sending you a list of established growth stocks.
* * *
Q — I own shares of Bristol-Myers for which I paid $48 a share. Should I sell and take a loss? It doesn’t pay much. I’m a widow Jiving on social security.
A — There Isn’t much loss, but that doesn’t have much to do with the case. The stock, top quality (A plus), yields less than 3 percent. It is a model growth stock, but I can’t see that it fits into the portfolio of an elderly woman who needs-maximum income.
* * *
Mr. Shvlsky welcomes written questions, but he will be able lo provide answers only Ihroueh the column. For Infor motion on retirement and preretirement planning, please Include a self addressed, stamped envelope. Address your requests to Sam Shulsky, care of The Gazette.
IO YEARS AGO — Russia stressed that it would never help pay for the U. N. Congo and Middle East forces and hinted than any challenge to its General Assembly vote on that account might break up the U. N.
Garden Shop Opens Saturday, March 23rd!
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to knock out both enemy aces and make sure of scoring at least nine tricks. As it is the defense can set up heart winners against him.
South can knock out the diamond ace and come to nine tricks with a successful club finesse, but he sees a much better play. He can make his contract if hearts break 4-3 in which case he will lose just two hearts and two aces or he can make it against any heart division unless both aces are in the hand with the long hearts.
Therefore, South should let West hold that first trick. West can do no better than continue the suit. South wins and then goes after diamonds. East takes his ace and can’t find a heart to lead back and South has time to knock out the ace of spades. Eventually South tries tile club finesse in an effort to score an overtrick.
This specially priced "Whirlwind” mower has 3.5 horsepower. Available only while inventories last! It has all the engineering and safety features that make this a special Toro! # 16273 21” size.
RID TAG SPEICAL Regularly 159 95
I 6073 is the 19 Toro' Whirlwind'' that s hand push style. Has fingertip starting,
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'Safety Shield’ helps protect toes
Wind-Tunnel* housing vacuums lawns
The Cedar Rapids Gazette: Tri., Mar. 22, 1974
The bidding has been:
You, South, hold:
108654 ? A K Q 8 3 4A J 5 4-What do you do now?
Take sour choice between pass ut four diamonds. Either actu may turn out to be the win-
You elect to hid lour diamonds d your partner bids four hearts, hat do you do now?
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Downstairs Store and Lindale Plata