Show BUSINESS and the STOCK MARKET by BABSON'S REPORTS ua t BACK TO FIRST PRINCIPLES In turbulent stock market periods many investors tend to lose their per per- As a result deflated growth stocks and asset asset laden laden mature or cyclical cyclical ical leal stocks are likely to be tossed overboard overboard overboard over over- board because of pessimism resulting from temporary paper losses and good buys tend to be ignored At such times management of ones one's portfolio requires careful adherence to a sound investment program Chose Your Objective Wisely The main mam function of portfolio man man- management is to guide an investor toward toward to to- ward a desired objective A prerequisite site site therefore Is is' selection of of a a goal best suited to the investors investor's personal situation Choice must be predicated upon many factors such as age family circumstances health income and personal personal personal per per- temperament pera ment A person who is retired and must have some investment income to sun SUD- social security annuity and pension payments should seek the pst est current yield commensurate with the continuity of such income and the safety of investment capital Rut But for forthe the tho investor whose earning power is still stin rising rising emphasis should be on can caD ital growth since the income is not need od ei for normal living requirements With the aid of a sensible family budget in investors investors In in- in this rate category gory can generate some new investment capital each year Follow Your Investment Policy Having selected one of the two aforementioned aforementioned afore afore- mentioned goals or one somewhere in between make your investment commitments in line with your objective tive It Is always well however to remain remain re reo re- re main flexible enough to contend with changes in business and financial conditions conditions con con- and to weather unexpected domestic domestic do do- or international reverses One aspect of this flexibility is ts maintenance of a 11 backlog of investment reserves in in- eluding bank deposits and good quality good bonds bond These can be used to make new commitments in depressed or undervalued undervalued under under- valued securities and they serve as a tranquilizer for jangled nerves in times of stress The balance of ones one's investment portfolio portfolio port port- folio may be he devoted to convertible securities se se- and ani common stocks This se segment segment seg seg- ment should be protected by diversification diversi- diversi as to industry and geographical region Current Investment Opportunity With ith both the bond market and the stock market still not too far from their recent cyclical lows the investor can Implement his investment investment invest invest- ment policy The reserve sections of an investment account may still reap generous generous gen gen- erous Irous current investment returns from hl high quality high quality bonds and preferred stocks And despite the stock markets market's advance advance advance ad ad- vance since late May there are still securities and common stocks of well well- established and financially sound industry in industry In in- leaders The frightful pummeling suffered by the Issues of the past bull market has also uncovered attractive buys for investors who can undertake the risk of possible further temporary slippage Buy Candidates For the income oriented Income oriented the Tennessee Tennes Tennes- see Valley Authority 8 3 3 of 1975 the Texaco 5 3 of 1997 and the Bell Telephone Telephone Tele Tele- phone of Pennsylvania 8 5 of 2006 are buys among bonds Aluminum Company Company Com Com- pany of America 3 75 Cumulative Preferred Preferred Pre Pre- and General Motors 5 Cumulative Cumulative Preferred are also suitable for safety and continuity of income with witha a measure of capital appreciation n potential po po- when money rates ease further In the realm of convertible securities the Florida Gas debentures 4 3 3 of 1087 1987 1987 the Ralston Purina debentures 4 7 7 of 1992 and the Tenneco Inc Convertible Preference stock are worth considering Among common stock the Research Staff of Babson's Baboons Reports currently favors Issues such as Standard Standard Stan Stan- dard Oil of Indiana and R R. R J J. J Reynolds Industries for income accounts For capital capital cap cap- ital appreciation and growth oriented portfolios Heublein American Sterilizer Morton Norwich Morton Norwich Dresser Industries and Rollins Inc are attractive t Diana iana Bates and two children of Salt Lake City Mr and Mrs Todd Searle and two children of Iowa Falls Iowa and Mr and Mrs Max Eugene Searle all visited at the home of Mr DIr and Mrs Milt Searle last week Max Searle just returned home from the service where he specialized in Electronic Technician field Mr Searle will attend school at Memphis Tennessee for nine more months |