'How High' Becomes 'Too High'

For many investors, the Dow's records bring puzzlement more than euphoria.

Some 92 percent of the mutual funds that invest in stocks underperformed the broader market for the first four months of 1997.

And 94 percent fell short of the market during the trailing 12 months.

And if the market turns around, those same funds could well lose their footing.

For many experts, the stock market's dazzling performance presents a reason to avoid it. They suggest some non-stock strategies:

1. A bond fund. Intermediate-term funds, such as Spartan Investment Grade Fund, (800-544-8888) may work better than long-term funds, since some analysts expect interest rates to rise.

2. A money-market mutual fund. Yields are running around 5 percent, which beats the return on many stock funds.

3. A bank CD (certificate of deposit). Banks have become highly competitive, with rates on one-year CDs now ranging between 5.5 percent and 6 percent.

Most analysts suggest avoiding CDs for terms longer than a year because of possible additional interest rate hikes.

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK