Conference nyoss1::market_investing

    
    Re: .-1
    
    Utility stocks normally doing well during recession time, by current
    defintion, it will be past 12-16 monthes period. Whether it's recession
    now, it depend on whom you talked to, or which president candidate you
    vote for.
    
    Anyway, I'll invest my money in mutual fund as a begining if I were
    you. Fidelity utility sector fund is good one, with sound track record.
    Utility stocks do give you dividend cushion during market down turn.
    
    Historically, I would say return on utility mutual fund do give you
    2-5% better than inflation rate.
    
    I won't touch individual stock, if I'm rookie in investing world and my
    net amount is less than $50K.
    
    Just my .02
    Michael..

    Utility stocks are ok if you want stable income through dividends and
    should be seriously considered as part of the "low risk, low volitity,
    stable return" portion of your portfolio.  You can pick utilities that
    offer Dividend Re-investment plans where, after you buy some stock and
    enroll in the plan, you can purchase additional shares, including
    re-investment of dividends, without brokerage fees (sell, too). Some
    utilities also offer a discount plan on re-invested dividends.
    
    Although I generally recommend Mutual Funds for novice investing, it is
    not particularly difficult to intelligently select utilities that meet
    your risk/reward goals - no more difficult than picking a MFund.  My
    advice would be to pick up a copy of "Buying Stocks Without a Broker",
    Carlson, McGraw Hill available at most bookstores.  Then, with the
    hints about individual stocks contained therein, go to your local
    Business Library and look up the write-up of those stocks in Value Line
    (some DEC sites' libraries have Value Line). Besides the text, look at
    PE, Timeliness (although their guess is often just as good/bad as
    yours), Safety (ditto in spades).  With utilities, try and find some
    that have recently de-commissioned a nuke.
    
    You might want to look at:
    	* Public Service of Colorado
    	* Central Maine Power
    	* Detroit Edison
    	* NICOR
    	* Puget Sound P&L
    	* Philadelphia Electric
    
    Understand that utilities are not VERY high-returners; mine return, on
    an average, an annualized rate of 9% per year. Not particularly
    impressive, but they have been producing that annualized rate each week
    (I update my portfolio weekly) for the past 5 years. I consider that an
    acceptable ROI for the "stable" part of my portfolio. 
    
    It's not difficult to select good utilities. My selections are doing
    about 50% better than the Fidelity Select Utility Fund (6.43% as of
    3/31/92) and I do not have to pay a 3% sales charge. Of course,
    depending on your tax bracket, you often can do better in a Tax Exempt
    Municipal Fund.  
    
    FWIW,
    
    Dave

    If you are going to buy your own individual utilities I recommend you
    diversify among product (electric, water, gas) and geography.  This is
    not coincidentally the same way Value Line classifies the utilities it
    covers.  Which means, yes, I recommend you read the VL writeup on any
    utility you plan to buy.  VL is particularly helpful in this area as
    they explain the quirks local to each stock:  the regulatory environ-
    ment, the legal environment, and so on.  This way you won't be overly
    surprised when your stock goes from 38 to 22 the day after you buy it.
    
      John

    re .1-.3
    
    Thank you for the help. It was my gut feeling that Utilities are fairly
    safe and since you're not getting a huge return up and above the
    inflation rate, its best to buy Utilities via a DRIP and preserve your
    profits that way. You've confirmed my feeble understanding. 
    
    I haven't "bought in" to a DRIP before so this looks good.
    
    CV

    DRIP= ?
    
     Please enlighten ?

DRIP is an acronym for Dividend Re-Investment Plan.  First you aquire shares, 
usually through a broker, then you enroll in the company's DRIP (assuming they 
offer one, most do not). Subsequent to enrollment, all dividends may be 
automatically re-invested. 

Usually, but by no means always, shares (and partials) purchased (and sold) 
through DRIPs as a result of dividends are purchased with low or no brokerage 
fees.  Usually, DRIPs permit you to send in cash to purchase additional shares 
(again, usually without brokerage fees).  In many DRIPS, your re-invested 
dividends purchase shares at a discount; in some DRIPS, additional cash purchases
also benefit from a discount. There are even a few companies that permit you to 
purchase your initial shares directly from the company instead of incurring
brokerage fees.

DRIP shares are held in your name by the company or a transfer agent. Their 
bookeeping is excellent.  It has to be since each and every DRIP purchase is for
new stocks at a new cost basis.  Keep your statements!!!

DRIPS offer two significant attractions.  First, you get the statistically proven
benefits from dollar cost averaging. Second, you get to make your additional 
purchases without brokerage fees.

Dave

    re. .6
    
    Good clarification on DRIPs.
    
    I was unaware that you sometimes have to buy your initial shares through 
    a broker. 
    
    I expect the initial number of shares that you have to buy, to get
    enrolled, varies from company to company, true?
    
    CV

   You usually only have to own 1 share as all that is needed is to be on
record as a shareholder. I think I saw at least one that required 2 shares.
Usually you have to buy the first share from a broker and it must be in your
name. An exception here is Proctor and Gamble which allows you to buy your
first share direct direct from them.

If you are interested look into the book "Buying Stocks Without a Broker".
It will explain it as well as list all the companies that offer this and
what their requirement are. It will also list the company which handles their
plan as it is usually not handled by the company itself.


        /Ken
 

    re .8
    
    Thank you. I've got the book on order right now (they didn't have it in
    my local book store).
    
    Since I've never bought stocks through a stock broker, I'm curious if
    you can give me an approximation on how much you save using a DRIP
    versus buying via a broker. I imagine it varies a lot, but an
    approximation would be helpful.
    
    CV

    Plans vary,
    
    Some are now changing to higher minimum shares (ome of the Bells are
    10,  Dean Foods went to 25, Disney within the last year stopped their
    plan).
    
    Some allow both the dividend reinvestment, and extra cash investment at
    a discount to the market prices (5% or so) on the purchase date.  Some
    reinvest and cover the commissions themselves, but it shows up in your
    year end summary as extra income.  Some (Hershey for example) reinvest
    the divident, comission free, but extra cash investments have a
    surcharge (5% in this case).  I believe there are even plans which DO
    NOT allow extra cash investmenr, just dividend reinvestment, but I
    don't know of or own any myself.
    
    Bill