What’s hot? Blue chips, mutual funds investments of choice

Investments for 1997 look to be the old standbys of blue-chip stocks and mutual funds for those looking to have a conservative, long-term investment for the future.
“People, however, need to know what their goals are, how much risk they are willing to accept, the amount of money they are willing to invest, and the time they would be willing to invest,´ said Roger Sample, certified public accountant with Sample & Bailey.
Blue-chip stocks include companies such as PepsiCo Inc., General Electric Co., Texaco Inc. and Hewlett-Packard Co., to name a few. These companies constitute great long-term investments because they have a proven track record and are multibillion dollar corporations, said Bradley Kroneberger, vice president of A.G. Edwards & Sons Inc.
People are able to trust these companies because they know them by name and because their stocks always have a good return, Kroneberger said. Year after year, these stocks beat interest rates and give investors a better return than Treasury Bills or CDs, he said.
“Many times, people don’t ever sell their blue-chip stocks – they simply pass them on to the next generation,” Kroneberger said.
In today’s market, there is also a lot of money and hype over mutual funds, said Kurt Gunderson, investment officer for First National Bank of Fort Collins. It is a billion-dollar-a-day industry.
Mutual funds are a great way to invest because your money is professionally managed and you will have a strong return, Gunderson said.
Gunderson also stresses that you don’t have to be wealthy to invest. Some funds can be started for as little as $50, he said.
There are two types of mutual funds, load and no-load – load being the mutual funds that have a commission attached. American and Fidelity are two load funds.
No-load is noncommission like a mid-cap fund, or Brandywine, which is more aggressive with a higher return, Sample said.
“We are really encouraging people, currently, to look at size funds like small-cap, mid-cap, or large-caps,” he said. “By investing in this pattern, consumers are spreading out their risks.”
It is important for investors to have a diversified portfolio of investments to balance out their risks, Sample said.
“We also encourage investments in the international markets with mutual funds,” he said.
However, if you are looking for a short-term, safe investment with a lower yield, Treasury Bills and CDs are a feasible option, Gunderson said.
Treasury Bills are also a good investment because you don’t have to pay any state taxes, he said.
Currently, Treasury Bills for one year are yielding a 5.43 percent return with a minimum investment of $10,000. CDs for one year are yielding a 5.38 percent return with a minimum investment of $500, according to First National Bank of Fort Collins.
It is important to start as soon as possible by investing and putting away 10 percent each year of your annual earnings, Sample said.
Another great way to stack up earnings for the future is by investing in a corporate 401(k) plan. The 401(k) plan will allow employees of corporations to put away money for retirement with pre-tax income. It’s a great sheltered arrangement, Sample said. For anyone thinking about investing, he added, there is no time like the present.
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