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Subject: Making Money In The Mutuals
Date: Thu, 19 Nov 92 13:26:44 EST
Message-ID: <6.1992Nov19.132644@AmeriCast.com>

11/19/92


TITLE Making Money In The Mutuals Selection Beats Timing In 12-
Year Stretch

CDA/Wiesenberger#m#cq#m# Study Reinforces Value Of Stock Pickers
Doug Rogers If you had to pick between a market timer and a sec-
tor picker, which would you choose?  A recent CDA/Wiesenberger
study says you would be better off with a sector picker.  The
study is based on two fictitious investors, who last appeared in
the 1975 addition of CDA/Wiesenberger's annual volume, "Invest-
ment Companies.' Both are truly gifted individuals. Mr. A can
perfectly call every market swing of at least 10%, while Mr. B,
choosing among energy, financial services, gold, health care,
technology and utilities, can tell which sector will do best in a
given year.

Both investors started with $1,000 on Jan. 1, 1980. By Sept. 30,
1992, Mr. A, in calling nine major market turns, had parleyed his
$1,000 to $14,650.  Meanwhile, by calling each year's top-
performing sector, Mr. B turned his $1,000 into $62,640.  By com-
parison, a $1,000 buy- and-hold investment in the Standard &
Poor's 500-stock index would have grown to $6,030.  The magnitude
of the difference between timing and industry selection is even
more powerful in the original 1975 study, according to Steve Sa-
vage, managing editor of CDA/Wiesenberger.  The original Mr. A,
who started in 1940 with $1,000, made 12 perfect market calls and
had $104,761 by the end of 1974. The original Mr. B, who was
granted more liberal powers that allowed him to move between
dozens of industries, made 29 investments and turned his $1,000
into more than $11 million.  Both examples are impossibilities,
CDA is careful to note.  Furthermore, even attempting such an in-
vestment agenda would entail a great deal of risk. Taken to the
opposite extreme, the new Mr. A would be left with only $460
after 12 years of perfectly bad market timing, and Mr. B with
only $270 after his perfectly bad industry selection.

But Savage notes that the results do illustrate clearly that good
selection, which real-life managers have demonstrated is possi-
ble, is more important than timing, which most have found to be
unachievable.  ***

Invesco Funds Group has added a couple of portfolio managers to
its team.  Barry Kurokawa will assist John Kaweske in managment
of Invesco's Financial Strategic Health Sciences Portfolio, which
has $746 milion in assets.  Mary McAleer will manage about $756
million in assets in two money market funds: Financial Daily In-
come Shares and Financial U.S. Government Money Fund.  Prior to
Joining Invesco, Kurokawa was vice president and a senior analyst
with Trust Co. of the West. He holds an MBA from Loyola Marymount
University and a BS from California State University.  McAleer
joined Invesco from New Jersey Manufacturer Insurance Co., where
she managed a portfolio. She completed post-graduate studies in
finance at Villanova University and received her BA from Rosemont
College.  Additionally, Ingeborg Cosby, formerly an analyst, now
manages the $68 million Financial Tax-Free Money Fund. She joined
Invesco in 1985.  Fiona Somerville will take over management
responsibilities for Financial Strategic Pacific Basin Portfolio.
She specializes in Asian and Australian markets and is a graduate
of Oxford Univerity in London.  Invesco Funds Group is a wholly
owned subsidiary of Invesco MIM PLC, a London-based worldwide in-
vestment management firm.  ***

Jones & Babson offers a free booket investment planning booklet,
Successful Investing Simplified - 10 Steps to Financial Security.

The 13-page guide presents basic investment concepts in simple,
straightforward language and outlines 10 easy steps that anyone
can take to help reach their financial goals.  "Many people sim-
ply don't know the basic common sense steps that they can take to
get contorl of their financial future," said Richard Graber,
senior vice president of Jones & Babson, a Kansas City, Mo.-based
fund company. Even for those who already have set up investment
programs, the booklet serves as a helpful reinforcement tool.

The first rule is beginning with your next paycheck. Put aside at
least 10% of your gross pay in an investment account from now un-
til you retire - whether that's in five years or 45 years from
now.  Another is diversify your investments. Putting your eggs in
several baskets spreads the risk. Still another rule is use time,
not timing, to reach your investment goals.  To order the book-
let, call (800) 422-2766.

This article is copyright 1992 Investors Business Daily. Redis-
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