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Bits and pieces about investing

Richard Loth

This week’s column is comprised of a variety of interesting investment education items, which I think are worthwhile passing along to readers. I’ve collected these “bits and pieces” over the past few months and believe that you will find them useful and, in one instance, entertaining. Roy Weitz’s Fundalarm. Weitz created his Web site, http://www.fundalarm.com, in 1996 as a free, informational resource for mutual fund investors. His basic idea is very simple – investors need to know when to sell a mutual fund as well as when to buy it. Weitz puts funds into four categories of concern ranging from a “no-alarm” all-is-well rating to a strong-candidate-for-selling “three-alarm” rating. Essentially, the Weitz formula is one in which funds “set off alarms” as they underperform their benchmarks over one-, three- and five-year periods.Jeremey Siegal’s new book, “The Future for Investors.” Siegal’s previous book, “Stocks for the Long Run,” written 10 years ago, is a classic work and one which every serious investor should have in his/her investing library. His most recent book, which was released last week, is equally as good. In this book, Siegal takes a look at investing in the 21st century and discusses those types of stocks and stock funds that investors should acquire to build long-term wealth. In an interview about his book with Better Investing magazine, Siegal provides this advice to investors: “So I find that if you can take your portfolio toward those high-dividend, low-P/E stocks in certain sectors, combined with an indexed approach, you can have a decided edge in your long-term investment performance.” I admit to being a Siegal disciple and suggest you refer back to my “Vail Daily” column of Sept. 9 for specific recommendations on the approach discussed in his new book.Standard & Poor’s “dividend aristocrats.” Apropos to Siegal’s preference for reliable, dividend-paying stock investments, S&P maintains a list of companies, which at this time number 58, in its S&P 500 Index that have increased their dividend payments in each of the last 25 years. For stock pickers, these steady performers are definitely worth checking out. To do so, log on to http://www.indices.standardandpoors.com and click on “Indices” at the top of the screen, which will take you to the “S&P Indices” page. Scroll down and on the left side you’ll find a box entitled “Index Highlights.” Here you click on “S&P 500 Dividends” and then “S&P 500 Dividend Aristocrats 2005.” Some of my favorites on the list, among others, are (by ticker symbol) ADP, USB, BUD, BAC, and EMR.Interesting corporate mergers. There isn’t a lot of opportunity for humor in the investment business, so I couldn’t resist including this item for your consideration. You may be aware that so far this year it appears that merger and acquisition activity has picked up compared to last year. For example, SBC Communications is after AT&T, Proctor & Gamble picked up Gillette, and Oracle finally bagged PeopleSoft. I picked up the following merger ideas, which are admittedly a bit old, from a most unlikely investing source, “Farm Industry News,” January 1, 2000: Hale Business Systems, Mary Kaye Cosmetics, Fuller Brush, and W.R. Grace Company merge to become Hale Mary Fuller Grace. Polygram Records, Warner Brothers and Keebler Crackers become Polly-Warner-Cracker. Xerox and Wurlitzer merge and begin manufacturing reproductive organs.”Morningstar FundInvestor.” Delivered electronically, this is a worthwhile monthly newsletter from the respected independent investment research firm, Morningstar. It provides comprehensive, up-to-date information on 500 mutual funds, the “elite 5 percent of all funds,” covered by the company. At an annual subscription cost of $69, the monthly, 48-page reports are affordable for even small fund investors. Log onto http://www.morningstar.com and scroll down to “Morningstar Newsletters” and click on “Morningstar FundInvestor” for complete information.The Investing Wisely column is written by Richard Loth, managing principal of Mentor Investing and an independent registered investment adviser. Loth can be reached at 827-5591 or mentorinvesting@comcast.net.Vail, Colorado


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