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Show The Park Record Wednesday, May 17, 2000 B-12 Talking Shop Hogs get slaughtered, says the old adage by Bill Mullen RECORD GUEST WRITER There is a saying in the investment invest-ment industry that says "pigs get fat and hogs get slaughtered". As I write this at the start of the second sec-ond week of May, there appear to be a lot of hogs around. I was talking to the wife of a friend who has gotten into day trading. About six weeks ago, the husband was tellins me how he was making $5,000 to $7,000 weekly by day trading. Just recently, I asked the wife how her husband was doing in this down market. She replied, "You know, he used to call me once or twice a day and tell me. We just made $700 in three minutes, or $850 in two hours," but he stopped calling." call-ing." She said she asked him what was happening with their money and he replied that thev "Were still OK.- Investors get fat slowly Much of day trading activity has been aimed at companies invoked in the new economy, i.e., technology. And day trading is the furthest thing from diversification diversifi-cation that I can think of. However. 1 just finished an article in a supplement to the May issue of Financial Planning magazine. The article is titled "Defending Your Asset Allocation Strategy" and was written bv Scott Herrick. Asset Classes Move In & Out of Favor Annual returns over the past 20 years (Dividends reinvested) Grade SmaU IrII Large Vield Year Bomb Slocks SlUikS Muski Pyndj REIT? m) 2.7I .W.frO 24.43 4.05 24.37 C5 .ru3 -1.03 6.54 6tX) ls; CtC 24 95 -0.S6 21.50 30 41 21. N) 1983 8.3f. 13 24.61 2242 16.59 30.64 19S4 15.15 -T.30 7.86 6.16 6.74 20.93 1985 22.10 31.05 56.72 31.56 21 81 19.10 1986 15.26 5.68 69 94 1864 13.23 19.16 9S7 2.76 -880 2493 5.27 1.93 -3.64 I9S8 7.89 25.02 28.59 16.55 13.57 13.49 1989 14 53 16.26 10.80 31.61 -2.77 8.84 191 8. -19.51 -23.20 -3.05 -1112 -15.35 W 16.00 40 It 12.50 30.47 40.22 35.70 1)2 7.40 IS.41 -11 85 7.62 18.36 1459 1993 9.75 18.88 32.94 10.08 19 84 19.65 1994 -2.92 -1.82 8H6 1.32 -3.68 3.17 19VS 18.47 2845 11.55 37.58 1738 15.27 199t. 3.63 16.49 6 36 22 12.98 35.27 1997 9.65 22.36 2.0t. 33.36 13.17 20.2"' 1998 8.69 -2.55 20.33 28.58 41.07 -17.51 1999 -0.82 21.26 27.30 21.04 4.78 -4.62 Lanx 5hxAs. SAP .W. Small Sinks: Ruswtt 2(W : Stinks: MSCI EAFE Index: Imminent Grade Bonds: .4 ggregair Index: High Yild Bmnh: Upper High Yield B, Index Vims-proof your system Continued from B-11 tion software vendor's Web site to find the latest updates. Some viruses are as benign as the common cold, and others can be deadly to your hard drive. With more than 17.000 known strains, the chances that your computer will contract one at some point are pretty good. Take into account that only about 40 percent of PC owners use anti-virus software, and that viruses can spread to your system easily from the Internet, bulletin boards, or e-mail attachments, and we're talking epidemic. uckiiy. though, there are some pciwuful 1'inuHatui mi mares and some equally effective anti dotes once you've contracted a bug. A computer virus is a piece of software that has been written to surreptitiously enter your computer com-puter system and "infect" your files. Typically a computer virus will replicate itself and try to infect as many files and systems as possible. If your system is infected, when you save a file to a disk you will probably infect the disk, and in turn whoever else uses that disk will infect their system. sys-tem. It's a vicious cycle, not unlike the viruses that plague us humans. Sext week: What are viruses, - and how can you protect your computer from them? w ho is w ith Columbia Funds. I have copied one of the tables from ihe article foi your review. The table lists sis asset classes and covers the years 1980 through 1999 Look at the highest earners for each of the 20 years and a few things become apparent. First, last years' leader is more often than not, not this years" leader. Second, there is a whole world of opportunity opportuni-ty outside of the U.S. Note that t h e International Stock led the asset classes listed in seven of the 20 vears. ' Third, every class was a leader at least once and finally, every class lost money during at least two years. If you review the history of mutual funds, you will find that the statements state-ments above are also true with respect to mutual funds as they are to asset classes. That is because mutual funds, if they are true to their stated objectives, will invest in one or two classes of assets. Time on my hands As I was writing this, I was curious as to how $100 invested in each of the classes, in the beginning of 1980 would fare 20 years later. Since it was raining that day and 1 had the time plus the curiosity, I came up with the lull Lehman md Fund following dollar and annualized results: Pttieace for !he Iaestors You might be asking yourself, "Why not just invest in Large (Cap) Stocks?" Well, as we are fond of saying in the investment industry (and in many cases required to say by the SEC), pass performance is no guarantee of future results. Further, you may not have a twenty-year investment horizon and subsets of five or 10 years could have a different leader during dur-ing that time period. The question you should ask yourself is "Can 1 sit still while invested in only one class while another class radically outperforms outper-forms my investment choice?" Or worse still, can you sleep well while your sole investment class is losing money? The lesson to be learned from the twenty-year chart is that diversification is good and that it can help you sleep better. How diversified is your portfolio? port-folio? In how many asset classes are you invested? You could be invested in two or three different mutual funds and not be diversified diversi-fied at all. Contact a certified financial planner practitioner to help you get the answers. It could help you sleep better. . - . Bill Mullen is a Certified Financial Planner and a resident of Park City. He is a registered representative and offers securities securi-ties through Walnut Street Securities. Inc. Member SASD. SI PC. Securities activities are supervised from a WSS Branch office at 2180 S. 1301 , Ste 420; Salt Lake City UT 84106. He holds an MBA in Finance and is a member of the Institute of Certified Financial Planners (ICFPl and is President of the Utah Society of the ICFP Questions may be addressed to him at Bill Mullen; do The Park Record; P.O. Box 3688; Park Citv, UT 84060. Program Bank On 30yrFix 15yrRx 1 yr ARM 8.550S 8.350 7.150 December 1999 Value of $100 invested on January 1,1980 in Each Asset Class !NV GRADE SMALL INTL LARGE BONDS SJM SIKS SltkS VALIE S77 $1365 , $157 $269 GAIN t !. 13.H I O 17.85 HIGH VIELD BQNJ2S. MJIS TOTAL S747 SI 92 SX) J tts". na' -ts.tr 1 Chase Manhattan Mortgage 30yrFix 8 750. Home Equity 9.000 71 ARM 8.375 Countrywide Funding 30yrFix 9.000 15yrFix 8.750 J'1 yr ARM 8.750 Crossland Mortgage 30 yr Fix 8 875 15 yr Fix 8.375 71 Jumbo ARM 8.250 First Colony Mortgage 30 yr Fix 8 750 15yrFix 8 375 30 yr. FHAVA 8 875 Key Mortgage 30 yr Fix 30 yr Jumbo 5 yt Balloon 8.375 9.500 8.500 North American Mortgage 30 yr F'x 8 750 15 yr Fix 8 375 51 ARM 8.375 Triad Financial 30 yr Fix 9 000 15yrFix 8.625 1 yr ARM 8 000 Washington Mutual 30 yr Fix 8.500 15yrFix 8.250 1 yr ARM 7.750 Sons Mortgage 30 yr Fix 15 yr Fix 71 yr ARM 8.750 8.375 8.250 0 5 0 5 ' 0 10 26 T-BB ; 0 5 0 5 0 5 25 T-BV 0 10 0 5 0 10 26 T-Bi - -1 0 5 il. 0 10 0 10 16 T-BS . ', -, 1 ;" f" - -i'" 0 5 . 0 10 - 0 3 - '- ' 0 5 0 5 0 10 . , ', 0 5 0 5 0 10 Zt TB 0 5 0 5 . , 0 5 2 T-&I ' f - i -w C.250 3 ' ; 0.125 3 0 000 3 15 T-B ? V, 0 5 w - 0 5 , !( 0 10 26 T-&S The Utah Mortgage Pulse includes up-to-date information on home Boat? rates ' charged by Salt Lake City area lenders. The information was accurate on Monday. May 15th but is subject o change without nobca. - Closing points: One point equals 1 percent of the loan amount Most lenders also require private mortgage insurance with downpayments of less than 20 percent. Also, most lenders charge loan processing tees up to S3C0, credit and appraisa! fees up to $400. origination fees of 1 percent, along with other dosing costs. Index: 1-BA - TiekJ on tyr T-BtR. COR Cost of Funds Index. MDU12- Month Treasury Average Index. Ubor London InterBank Offered Rate Source: Mountain Express Mortgage '(35) 647-3700 1884y 1884 PARK CITY PLANNING COMMISSION AND CITY COUNCIL NOTICE OF PUBLIC HEARINGS Comprehensive and Substantive Re-write of PARK CITY'S LAND MANAGEMENT CODE, including zone district and boundary changes. CHAPTER 7 ZONING DISTRICTS AND REGULATIONS DATETIME: Planning Commission-May 24, 2000 at 7:00 PM (Focusing on E-40, E. R-1, RM) DATETIME: Planning Commission-June 14, 2000 at 7:00 PM (Focusing on RD, RDM, RC, GC, Li, FPZ, SLO) DATETIME: City Council-June 8, 2000 at 6:00 PM (Focusing on HR-2, HRM, HRC, HCB, POS, ROS, SF, RCO, and zone changes as stated below) PLACE: City Council Chambers, City Hall, 445 Marsac, Park City Proposed zone changes include, but are not limited to: 1 . Rezone to the new HRM zone, all RM and HCB properties on Park ' Avenue, north of Tenth Street and south of Fifteen Street. Rezone to the new HRM zone, the HR-1 properties on the east side of Park Avenue between 10th and 12th Streets. Rezone GC zoned property on west side on Park Avenue to RC. Rezone RM properties north of 15th Street to RC Rezone E zoned City Park property east of Park Avenue to ROS and the E zoned property at 1102-1114 Park Ave. to HRM. Rezone to HRL, a!l HR-1 properties located south and east of Ontario and Marsac Avenues. Change to the new HR-2 zone, all HTOHR2 properties located east and west of Main Street with the exception of City property along Marsac and Swede Alley which shall remain HR-1 without the HTOHR2 overlay. A draft of th revisions it tvailaMa at ttw Planning Oipartmsnt, piatM cs3 f 2. 3. 4. 5. 7. Who needs all this stuff? Record dew ouf Hunt- -Oofs jeHu Hwif you Wippc over 01 iv puV your garage $&e. in He dSJi-PtcAj reAy nvA wc will V Hvrow in He SiHJ. -ft LAV iri,X A W ' ArV x V t . " I v Poo: |