"The successful soft landing engineered by the Federal Reserve has made sustainable economic growth through 1996 and possibly 1997 seem more likely," says Bob Brinker's Marketimer newsletter (Box 321580, Cocoa Beach, Fla. 32932). "If this growth persists, the great bull market of the '90s is likely to go on ticking like the Energizer Bunny. Upside potential has now increased due to the favorable economic fundamentals."
- Seligman Frontier Fund, which has appreciated an average 16.6 percent annually over the last decade, has finished among the top half of all small stock funds in nine of its first 11 years. It's achieved this admirable consistency by sticking with relatively inexpensive stocks with both sales and earnings growth of at least 20 percent annually. Recent favorites: Cognex, California Energy, Sitel Telecommunications, Lam Research, Aspect Telecommunications, Omnicare, Sanmina, Synopsys.- The temporary-help market has grown 15 percent annually over the past decade. More companies are contracting with temporary-help providers on a permanent basis, ensuring their economic stability. Stocks of temporary-help providers were relatively flat in 1995, due to recession fears. But Standard & Poor's Outlook (25 Broadway, New York, N.Y. 10004) believes the relatively mild slowdown and the companies' excellent long-term prospects make them buys now. Its favorites: Kelly Services, Manpower, Olsten.
- Wall Street tends to throw out the baby with the bathwater, overselling even superior companies in out-of-favor industries. Contrarian investors can make a lot of money bucking this trend. Forbes recently identified 10 unjustly shunned stocks in five unpopular groups that analysts believe have particularly strong rebound prospects: Bethlehem Steel, Inland Steel (steel); Ford, G.M. (autos); Cagles', Tasty Baking (food processing); Fedders, Rival (appliances); Landstar System, TNT Freightways (trucking).
- "Underlying demographic trends support our disinflation scenario, as well as a continued downward drift in bond yields," say the credit-market analysts at Deutsche Morgan Grenfell. "In absolute terms, borrowing is up sharply and may look bearish for bonds. But compared to GDP, it is low and subdued. We believe 10-year bond yields will fall to below 5 percent by the end of the year."
- Some investors are comfortable only buying mutual funds recommended by their brokers. So Smart Money magazine (1790 Broadway, New York, N.Y. 10019) recently ran a computer screen of 200 diversified domestic stock funds sold through big-name brokerage houses. Here are the seven funds with the highest average annual returns over the past five years: Hancock Special Equities (up 20.2 percent annually), MFS Emerging Growth (up 19.7 percent), Seligman Frontier (up 17.4 percent), Parnassus (up 17.2 percent), Vista Capital Growth (up 17.0 percent), Alliance Growth (up 16.5 percent), Quest for Value Opportunity (up 16.3 percent). The last two funds are rated "medium-risk" and "low-risk," respectively.
- Gold has been staging a quiet rally over the past several months. Most gold investors prefer to buy either bullion or precious-metals mutual funds. But the individualists among them still lean toward individual mining shares. Which gold shares look best to the experts at this juncture? According to The Hulbert Financial Digest (316 Commerce St., Alexandria, Va. 22314), only two mining stocks are currently being recommended by six or more investment newsletters it monitors regularly: Barrick Gold and Placer Dome.