Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Sunday, December 1, 2002

How would you invest $25,000 in today's market?

Advertiser Staff


We asked the financial professionals listed below what they would recommend to a theoretical investor who inherits $25,000 and wants to put it into stocks, mutual funds or bonds to increase the value over the next three months.

They selected five investments of $5,000 each on Sept. 12. The chart shows the value of those investments, as of the close of the market on Friday. They are only allowed to make changes once per month. The rules put limits on the professionals that would not normally apply, and their performance must be viewed with that in mind.

Investing over a short period is risky, and this is not intended to suggest these investments are appropriate for any individual.

The participants were asked to give a comment on their picks and what they would do differently if the investments were for the long term. The date the comments were submitted is included in the chart.

Before investing in any security, it's important to evaluate your current financial situation and your long-term goals. In many cases, reducing credit-card debt or other debt would be a better use of any windfall.

The selections are those of the money managers listed and not The Honolulu Advertiser. The results do not include commission charges.

Larry Goeas, who participated in the earlier columns, has asked not to be included in future columns.

If you have any questions or comments, please contact: David Butts, assistant business editor, 535-2453 or dbutts@honoluluadvertiser.com.

• • •

Roberta Lee-Driscoll
Certified financial planner
1000 Bishop St., Suite 509
Honolulu, HI 96813
Explaining the picks

Accrued interest is interest that has accumulated between the most recent interest payment and the sale date of the bond. When a bond is sold, the buyer pays the seller the bond's price plus accrued interest. The buyer will get this interest back plus the interest he has earned when the bond makes its next interest payment. (Nov. 27)

Long-term strategy

To make sure that you get 2003 off to a good start you should consider doing some year end planning. Talk to your employer to make sure you will be making the maximum retirement plan contributions since the limits will go up in 2003. If you are over 50 you can make additional contributions. (Nov. 27)

Alan Matsuda
Certified financial planner
606 Eaea Place
Honolulu, HI 96825
Explaining the picks

VIPSX is a TIPS (Treasury Inflation-Protected Securities) intermediate-term bond fund, and it is riding the wave of TIPS's immense popularity. VIPSX is up a whopping 13.6percent this year alone & ranks in the top 1 percent in its category.  Such big returns aren't sustainable so sell sometime soon. TIPS aren't recommended for a taxable account. (Nov. 21)

Long-term strategy

Avoid long-term bonds, even for long-term investing, because their share prices fluctuate wildly when interest rates rise and fall as they inevitably will. Between September 1998 and December 1999, Vanguard's Long-Term Bond Index fund shares plunged over 15%. Instead, pick no-load (no sales charge) intermediate-term or short-term bond funds with low expenses. (Nov. 21)

Jim Rogers
Brookstreet Securities Corp.
419 South St., No. 121
Honolulu, HI 96813
Explaining the picks

Investing is a long-term process. Trying to profit in the markets over short periods of time increases the risk factor significantly. People with funds available for a short period of time would be better off going to a bank and buying a certificate of deposit or opening a savings account. (Nov. 29)

Long-term strategy

This Holiday shortened trading week brought stronger than expected economic news and had equities prices solidly higher. For people investing for appreciation, well-diversified equity funds with experienced managers may perform well. Always understand what you invest in and why. Ask how current economic trends will effect your holdings. (Nov. 29)

Bob L. Slate
Slate Financial Services
45-315 Lilipuna Road, A303
Kane'ohe, HI 96744
Explaining the picks

We are encountering resistance near the September highs. I believe the markets should retrace some of it's gains, and then continue higher late in the year. Normally, I would be going to a neutral bias in anticipation of a pullback, but since the challenge ends next month I will go a little more aggressive. (Nov. 4)

Long-term strategy

The outlook for the market is better. We have had some impressive gains over the last few weeks. The market sprinted out of the gates, but we must remember the race is a marathon, so I would look for the market to take a breather around here. The timing and length of a pullback is debatable. I would also remind investors that not much has changed in the macro economy. (Nov. 4)

Colin K. Watanabe
Branch manager
National Securities Corp.
1001 Bishop St.
Pacific Tower 1530
Honolulu, HI 96813
(808) 522-9000
Explaining the picks

CSCO shares were upgraded by several analysts this week. COST is faring slightly better than the rest of the retail sector as consumers seek value. The company plans to add 28-30 new warehouses in the U.S. and Canada. GE cut its earnings outlook for the quarter and for next year in light of large losses in its insurance unit. Still, the guidance was better than expected and the shares have firmed. (Nov. 29)

Long-term strategy

The Dow posted eight consecutive weeks of positive returns. Stocks have demonstrated remarkable resilience despite improving but lackluster economic conditions. Consumer optimism, and therefor spending, remains a bright spot.  Since the stock market tends to be a leading indicator, it seems to be signaling a recovery by mid-2003. I remain optimistic and fully invested. (Nov. 29)

Mario Yim
Raymond James
1221 Kapiolani Blvd., Suite 6E
Honolulu, HI 96814
Explaining the picks

This relatively quick rise in market values in the last few weeks have obviously hurt the performance of my bond fund and market short fund selection. Despite this, we feel still feel these holdings will continue to do well as a defensive investment. (Nov. 2)

Long-term strategy

There is still more downside risk in the overall market. We're in a trading range in which active traders would probably do better than the buy and hold investor. Obviously, the limited monthly trading restrictions in this contest prevents active trading. If this is the bottom, then a retest of the recent rise will be needed. There will be ample opportunities for long investors to buy in at lower levels. (Nov. 2)