Facebook Twitter

LONG-TERM INVESTING IS PREDICTED TO BE THE BEST STRATEGY FOR 1990S

SHARE LONG-TERM INVESTING IS PREDICTED TO BE THE BEST STRATEGY FOR 1990S

There's a lot to be said for buying stocks and putting them away. It allows you, and not your broker, to keep more of your investment profits. It cuts down on your tax liability. And it's a lot less stressful than worrying about the general market's day-to-day gyrations.

Changing Times magazine recently cited two reasons why it believes long-term stock investing will be the best financial strategy for the '90s: (1) a healthy world economy that will benefit stocks, and (2) the likelihood of lower capital-gains tax rates.With those points in mind, Changing Times asked six financial experts to design portfolios that should thrive through the coming decade. Three of their designated hitters put all their money in mutual funds. But the other three, representing vastly different geographic and philosophical outlooks, put all their resources into stocks.

Geraldine Weiss, editor of Investment Quality Trends in La Jolla, Calif., and one of American's best judges of relative-yield value, divided her portfolio among six undervalued blue-chip stocks whose dividends are likely to grow steadily in the '90s:

Baxter International, the world's largest supplier of health products, which has raised its dividend more than 400 percent in the past decade; Bristol-Myers, whose merger with Squibb will produce the second-biggest drug company in the world; Houston Industries, which provides electricity to the heart of the oil patch and recently yielded more than 8 percent; IBM, which has many new products in the pipeline and just raised its dividend for the first time in 41/2 years; Texas Utilities, which has one of the best dividend records on Wall Street, having boosted its payout each of the past 42 years; and Xerox, whose recent 5 percent yield is at an unprecedented high.

Tom Czech, chairman of the investment committee of Blunt Ellis & Loewi in Milwaukee, fashioned an aggressive growth portfolio of stocks likely to benefit from the long-term economic and social trends. Trend No. 1, in Czech's eyes, is the aging of America. He sees four health-care stocks benefiting from this: Biogen, Biomet, Bristol-Myers and Upjohn; as well as the mail-order retailer, Land's End.

Trend No. 2 is the need for increased business productivity. Czech envisions this requirement boosting the prospects of: Blue Arrow PLC (temporary help), W.E. Grainger (electric motors), Hurco (computer-based machine tools and controls) and Measurex (process control systems).

Trend No.3 is concern about water pollution. Here Czech recommends the stocks of three specialists: Betz Labs, Calgon Carbon and Groundwater Technology.

James Kalil, president of Compu-Val Investments in Wilmington, Del., has chosen a broadly diversified package of stocks that he considers dramatically undervalued, issues with bright long-term prospects whose prices have declined due to short-term difficulties. Kalil's favorite current bargains are Conrail, Ford, General Cinema and Helmer-ich & Payne.

His other long-term, low-stress choices: Amerada-Hess, Andrew Corp., Carlisle Companies, Communications Satellite, Continental Bank, Englehard, Hartmarx, Heilig-Meyers, Hercules, International Multi-food, K mart, Manor Care, Service Corp. International, Sherwin-Williams, Utilicorp United and Whirlpool.

Investor's Notebook reflects the opinions of professionals. It does not endorse specific investments, and no endorsement is implied or should be inferred. For more information, contact the individual firms cited. (C)1989 Universal Press Syndicate 4900 Main St., Kansas City, MO 64112