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Show If You've Lo st Money in the De 'espitc the recent snap-t- o in stock prices, a great many individuals who own shares have sustained losses. Confesses a spokesman for the New York Stock Exchange: "There is no way of estimating how many people have lost money in stocks since the msrket started down in November 1968. All we can say is that too many people have lost too much." How much is too much? What might the average loss be? Too much of a loss is defined by this spokesman as, "Any loss. A customer having made purchases on margin not long before the start of the market decline may have gone to the cleaners. Someone who bought stock 10 years ago may still show a profit on his holdings." This dialogue hardly tells you how well or how badly you as an investor are doing, or more importantly what you should do now. You can compute your own position by using key figures. Try this: For stocks: Figure what any stocks you owned were worth on November 28,1968. That is the latest market peak. And what they were worth last September 4. If they lost more than 26 percent, the decline for that period registered by the New York Stock Exchange index, then your losses are greater than the average losses for stocks listed on the Big Board. If the issues you own are listed on the American Stock Exchange, the decline for that period is 34.4 percent. If you own growth-typ- e funds, the decline in the same period is 29.5 percent, according to the Arthur Lipper Growth Fund Index. What about recovery? Between July 1 and Labor Day, the New York Stock Exchange's index rebounded by 13.6 percent. That of the American Stock Exchange rose 6.5 percent, while those growth funds recaptured 14.8 percent of their losses. Your broker can help you figure losses or gains over other specific periods of time. What you should do now depends on: whether you need immediate cash or additional income, and most importantly, which kinds of securities you own, Faye Henle is is completing a new book, a nationally known exfipert on economics and consumer nance. She is the author of "350 New Ways to Make Your Money Grow" and of Securities." :ock TVfa rlrot110 -- mr mm mm which specific stocks, bonds, or funds. if you need cash and you hold the stocks of blue chip companies that represent such industries as oils, utilities, finance companies, building equipment or product makers, or consumer goods, you can offer these as collateral for a personal loan. The consensus would be that it is well worth the cost of borrowing. Don't sell your good quality stocks now. If, on the other hand, the stocks you own represent somenot all of yesteryear's darlings: the stocks of highflying conglomerate companies, of the lesser-rate- d growth companies, of the swinging go-g-o or "hedge" funds, or of n speculative companies, forget borrowing. The thing for you to do is sell, either enough of the shares to net you the cash you need, or the total amount with the thought that in the years ahead you might recoup some of your losses with other investments. If ever there was a question of your needing cash, you never should have invested in those speculative issues. little-know- lowever, before you sell, review the stock of each company that you hold. The experts believe that some of these issues will still recover part of their losses. If the decision is made to sell and everyone will agree that it is much harder to decide to sell than to decide to buy and you have extra dollars that you don't immediately need, there are several things you can do: blue-chi- p y You can invest in stocks representing companies good-qualit- mm w mm mm Here's expert advice on steps designed to reduce or recoup losses By FAYE HENLE 0 that can be counted on lo benefit from upturns in the economy, cr invest in The experts feel that many of these stocks may not recover their former mutual funds whose portfolios hold stocks in these same companies. You will now be holding issues upon which at some future date, if you needed, you could borrow against. Meanwhile, you would probably be getting a higher return on your invested dollar. You can buy Government bonds that, at. this writing, will yield you 7 to e percent; corporate bonds that offer you an 8 plus, even a 9 percent return, and municipal bonds that would return you 6 percent. In addition to getting a nice return on your money, many of these issues are selling well below par, the price at which they will be redeemed. Thus they also offer the chance for capital appreciation. If you have enough money, you might want to consider buying some stocks andor funds and some bonds. If you have a modest amount of cash, anything under $5,000, the experts believe that the best place for those dollars is in a savings account. What should you do if your concern for cash is not immediate, but those paper losses continue to depress you? If you have losses in good blue chip stocks or in funds largely composed of these issues and of bonds, sit .tight. These are the stocks and the funds that are leading the market upturn. If your losses are in the glamour stocks of the past, the conglomerates, many of the electronic companies, or some of the makers, stocks that you bought at high prices when measured against earnings watch it! The moment for selectivity is now! highs in the foreseeable future, r. How do the experts decide which of such stocks to hold and which to sell? They are applying the yardsticks that formed the basis for investment decisions in the 1950's. They are looking at balance sheets again and not simply deciding to buy or hold on the basis of current or anticipated earnings of a company, which was the happy, almost slapstick method of the 1960's. If balance sheets confuse you, learn to ask the important questions. The way the experts are thinking now, the most important piece of information for you to determine is how liquid is the company in which you might invest, meaning how much cash does it hold or how much in assets that can be turned into cash overnight? high-grad- office-equipme- nt O 0 JV n 1 11 . .A. "Your World Floor of the New York Stock Exchange on a day of heavy losses during recent slump. I if-eve- lust because a company may be liq uid and may have good earnings does not mean that its stock will rise when the general tone of market prices is weak. It does mean, however, that you are holding a stock that has value, that sooner or later should be recognized. Hold the stocks of companies like these. Sell the stocks of companies heavy with debt or whose profit cannot be directly traced to increased sales of product or service or greater efficiency of operation. Is it too soon to learn any lessons from the losses you have scored? Exactly as it is difficult for individuals to face up to their mistakes, it is difficult to commit the experts to critique. Yet, numerous truisms penetrate the haze that still clouds the financial community. Those who have invested carefully have, for the most part, fared better than those who set fast capital gains in speculative issues as their goal. Greed seldom pays. Bonds have come into favor with much smart money being invested in them. This is a further reason for depressed stock prices. As you are being urged to weed the weaklings and strengthen your holdings, so mergers and closures of firms on Wall Street are strengthening the whole arena of the securities industry. You've been scorched, but so have men far more schooled in the ways of finance than you. Among you both, the victors will be those who stick with the best of their securities and conservatively approach the changed climate of investing for the 70s. |