WEEKLY WHINE

Interaction: Investing in 2003

Myers: Good evening, and welcome back to Warwickshire for another week of Interaction. I'm Debbie Myers. This week we've got some financial experts who can help you figure out where to put your money next year. Is the stock market a safe place to invest in 2003? Is the bond market? Should you stuff all your money under the mattress? Or should you eat it? Here to answer these questions, our panel begins in Singapore, with the chairman of the Singapore Standard Securities Station, Mr Chongo Vo Doru.

Doru: Good evening.

Myers: In Amsterdam, a defense industry analyst at Bank Horgo, Ms Jojoroja van Pebbles.

van Pebbles: Hi there.

Myers: In Jersey City, NJ, USA, we have the vice president of bond trading at the New Jersey Happiness Trust, Ms Rubi deVole.

deVole: Hi Debbie.

Myers: And here with me in our Warwickshire studios, the lead securities analyst at Ka-Ching TV North America, Mr Bill Po.

Po: Good evening Debbie.

Myers: Thank you all for joining us this evening. First, to recap the year in business, here's our financial correspondent from Columbus Circle in New York City, NY, USA, Mr Josh Frelange. Hello Josh.

Frelange: Good evening Debbie. Well, here's a rundown of the year so far, with one and one half trading days to go until next year. The Dow Jones Industrial Average has fallen to 8,303.78 as of yesterday's close, down 17.14% on the year. The Nasdaq Composite average closed yesterday at 1,348.31, having fallen 30.87% this year. The Standard and Poor's 500 now sits at 875.40, down 23.75% from the start of the year. In Europe, the British FTSE 100 index finished the week at 3,829.40, a drop of 26.95% this year. The DAX 30 in Germany now stands at 2,840.00, weaker by 44.96% since the start of the year. France's CAC 40 finished yesterday at 3,011.83, a fall of 34.87% in 2002. In Asia, the Nikkei 225 of Japan closed at 8714.05, down 17.34% this year, and the Hang Seng index in Hong Kong finished at 9,445.26, a fall of 17.13% this year. Debbie?

Myers: Thanks Josh. We'll be back to you a bit later in the programme. I'll go to you first, Chongo, and ask you what the safest investment next year will be.

Doru: On the whole, it would be best to follow the market signs. Go with whatever's working in the market as a whole, and try not to get on the market's bad side.

Myers: Noble sentiments there. Jojoroja?

van Pebbles: I would go with the defence industry, consumer goods, and treasury bonds. Also pork bellies.

Myers: Well, that's certainly an important thought. Rubi, what are the smart plays in 2003?

deVole: We're quite bullish on the bonds as well, and we feel that securities markets, on the whole, are going to be in for another rough year. In fact, we've got a little joke here where we call them the "insecurities" markets.

Myers: I think you can certainly consider that joke made. Bill?

Po: Debbie, the most important thing to observe in the market this year is that the people who are investing in it are investing in it. If your heart's not in it, you shouldn't be putting your money in it either. So on the whole, we think that most investors would be well served investing in things in which they believe.

Myers: A lot to consider there. Rubi, let's go back to you for a moment. As Josh said earlier, all the major stock markets were down at least 15% this year. As a bond trader, though, you'd presumably have more insight in that market. Do you really think that bonds will be outperforming stocks this year?

deVole: Certainly. The two year US Treasury note may be yielding an all time low, but on the whole, we feel that with continued uncertainty, the bond market is going to continue to look attractive to investors. In fact, we've got a little joke here where we call bonds "Barrys", because they keep hitting home runs.

Myers: I see. Jojoroja, do you also feel that stocks will be weak this year?

van Pebbles: Absolutely. Gold and oil will be good investments, but most stocks are going to be hard hit until the war with Iraq comes to an end. And most observers believe that the war will continue until Saddam Hussein is removed from power, with no indications as to how long that will take. So for the fairly long term, I'd say that defence is one of the few sectors that will have a good year in 2003. Also pork bellies.

Myers: I see. Chongo, your outlook on stocks?

Doru: Well, Debbie, the market is a strange beast. So far this year it's acted like a bear, a bull for a couple of weeks in the summer, an elephant for most of the spring, and then a pine tree this month. I think that if people regain their confidence, the market will respond to that and will start to act trustworthy.

Myers: All right. Now that we've thought about that, we'll prepare to take some questions. You can get your queries to us by using any of several methods: E-mail, fax, telephone, telegraph, teleoperation, and telemarketing. Here are descriptions of the connection methods that you'll want to use in each case, and a reminder that if you use telemarketing, you're liable to have someone, possibly myself, yell at you for suggesting that my current long distance provider is somehow inadequate. Our first question is an E-mail from Brett Tomkins in Cairo, Egypt. He says he's got about €10,000 invested in a Swedish massage firm in Cairo, and he's wondering whether he should transfer some of that to precious metals. Bill?

Po: My message to Brett is simple: Do what feels right to you. If you don't believe in your massage firm, it's probably time to put that money someplace else. A euro that's not in the right place is not a happy euro. Let your money be all that it can be.

Myers: Um, Jojoroja, you mentioned earlier that you're happy with gold and oil. Would you suggest that Brett, and others who may not have full confidence in where they're investing, consider precious metals?

van Pebbles: Definitely. It seems fairly clear that a good investment strategy for next year is going to include shiny things. Also pork bellies.

Myers: Well, with that, we'll have to go on to our next question, which is from Rando in Fort Mills, PA, USA. Rando, are you there?

Rando in Fort Mills: Yep, I'm right here.

Myers: What is your question?

Rando in Fort Mills: Well, I've got some money in General Mills, and I want to know whether that will be a good investment for the next year or if I should transfer it to precious metals.

Frelange: Debbie, if I can just cut in here for a moment, let me point out that General Mills, GIS on the New York Stock Exchange, closed yesterday at 46.36, down 10.86% year to date.

Myers: Thank you Josh. Chongo, what advice would you give?

Doru: You see, Debbie, these stocks are strange critters. General Mills is kind of like a bug that has a funny leg sticking out on one side. You know it can run, but you don't really know how fast it can run. General Mills is kind of like that. So it really remains to be seen.

Myers: Yes, but for what tangible signs should we be waiting? When will Rando know if it's time to pull out of General Mills?

Doru: If somebody stomps on it, that would probably be a good indication that things are not going well for that company.

Myers: I see. Rubi, let me ask you to compare what you expect out of both bonds and commodities this year. Do you think precious metals will be a better investment?

deVole: No, I really don't. In times of trouble, some investors may turn to shiny things, but many others turn to their governments. Treasury bills have historically been successful in times of war, and we're starting to see a bit of that now. We feel that yields are going to continue to decline, and so investors should be quick to get in to the treasury market before the yields become tiny. In fact, we've got a little joke here where we call precious metals "heavy", because they are.

Myers: In that case, we'll take another question, and it's by E-mail from Lester Chester in Worchester, MA, USA. He would like to know where to invest the money that he just won betting on dog races so that his wife won't find out about it.

Frelange: Debbie, if I can just jump in again, let me point out that Lester's wife Mayberry is watching, and she has just found out.

Myers: Thank you Josh. Well, the question may merely be academic in Lester's case, but if there are any others watching who are in similar situations, perhaps we can offer some guidance anyway. Jojoroja, what are some good secretive investments?

van Pebbles: Defence contractors are not very good at keeping secrets, so a good investment might be offense contractors. Also pork bellies.

Myers: Bill, have you got any advice?

Po: If your investment feels secret, it will be secret.

Myers: That, I think, will do it for our last show of 2002. Let me thank Mr Bill Po, Ms Rubi deVole, Ms Jojoroja van Pebbles, Mr Chongo Vo Doru, and our financial correspondent Mr Josh Frelange. Next week we'll be discussing the effects of winter weather in major cities, and we'll have civic organisers in Buffalo, Stockholm, and Moscow on the programme, along with a sidewalk salter who's experimenting with pepper. Good night.

deVole: In fact, we've got a little joke here where we call pepper "sneeze pellets", because we put them up one another's noses.

Myers: I can only assume that your health insurance policies do not cover injuries incurred from such behaviour.