Q–I’ve been interested in the 1996 U.S. Olympic Coins of the Centennial Olympic Games in Atlanta. I understand proceeds go to the U.S. Olympic Committee and the Atlanta Committee for the Olympic Games. Would these coins be a good investment as well?
A–Think of them as attractive keepsakes for a worthy cause. But, unlike the popular American Gold Eagle coin, commemorative coins such as those U.S. Olympic examples authorized by Congress aren’t generally considered true investments by experts in the field.
A total of 16 commemorative coins–four of gold, eight of silver and four of “clad” copper and nickel–have been produced with designs featuring symbols of the Olympics and various sports. They’re sold in sets of four.
Modern commemorative coins have been issued by the U.S. mint since 1982, and virtually none has increased in value,” said Mike Fuljenz, president of Mike Fuljenz’s Universal Coin & Bullion in Beaumont, Texas. “The one exception was the 1986 Statute of Liberty gold coin that did go up in value but has since declined.”
If you do buy these coins, be sure not to pay more than is necessary. You’ll pay less if you go through the U.S. Mint Customer Service Center (202-283-COIN), since firms that repackage and sell them generally charge a significant premium, Fuljenz noted.
Q–As a retiree of Sears, one-third of my investment portfolio is Sears stock. What’s your opinion of what the future may hold for this stock?
A–No need to shop around, since Wall Street analysts expect a bright future for this famous-name retailer. The only concern is that you have so much of your money in one place, since diversification would help considerably in spreading out risk.
The trend looks good: Of a dozen revisions made by analysts of their Sears recommendations this fiscal year, an overwhelming 11 were upward, according to the I/B/E/S International research firm. Similarly, of eight revisions for the 1997 fiscal year, seven were upward.
Current recommendations on Sears stock among 24 analysts covering it include six “strong buys,” six “buys” and 10 “holds.”
The company has handily beaten the forecasts of analysts, with second-quarter earnings of 67 cents a share outstripping the analyst consensus by 3 cents. Virtually every facet of its business experienced a sales increase, boosted by a focus on lower costs.
“Because Sears stock is down more than 20 percent over the past three months and the company just reported such robust quarterly earnings, the consensus recommendation is a `buy,’ ” explained Anthony Centeno, data researcher with I/B/E/S.
The Sears growth rate for this year is estimated to be 17.5 percent, to be followed by 14.5 percent next year.
Q–What is your opinion of the New Economy Fund? Is it a good choice for a college fund for children ages 6 and 9?
A–It’s been a disappointment.
This fund, which set out to snare stocks of service-oriented businesses that are likely dominate the world economy, has trailed its peers for the past two years.
The $4 billion New Economy Fund was up 21 percent over the past 12 months to rank in the lower half of growth funds, its returns hurt partly by holding too much cash. Its three-year annualized return of 13 percent ranks in the lower quarter of its peers due primarily to underperformance of stocks of financial firms.
“Because of restraints on what it invests in, New Economy is an interesting fund, but not an ideal core holding,” said Peter Di Teresa, analyst with the Morningstar Mutual Funds investment advisory. “It has no exposure to aggressive areas such as technology or to conservative areas such as utilities, energy and cyclicals.”
The top industry holdings have been broadcasting and publishing, telecommunications, merchandising, insurance and banking.
The New Economy Fund has a 5.75 percent “load” (initial sales charge) and requires a $1,000 minimum initial investment.
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Andrew Leckey, who co-anchors the two-hour “Today’s Business” program each weekday morning on the CNBC cable television network, answers questions only through the column. Address inquiries to Andrew Leckey, “Successful Investing,” Suite 367, 76 N. Maple Ave., Ridgewood, N.J. 07450.
