Dow could reach 15,000 in 2 years if growth keeps up

Dow 15,000 might seem like a stretch, but it's actually within reach, probably within two years, says Investor's World newsletter (7811 Montrose Road, Potomac, MD 20854). "All we need is reasonable growth (20 percent or so) in corporate profits through 2006. The rate of profit growth is steadily accelerating. Businesses are beginning to spend on new capital projects and technologies. Inflation and interest rates are low. The dollar is down and likely to go lower. All this is a healthy mix."

-- W.M. Equity Income Funds' old-fashioned buy-and-hold approach has allowed it to appreciate a very modern 11.5 percent annually over the past decade. It specifically looks for temporarily beaten-down stocks with histories of dividend increases. And it usually keeps between 70 percent and 90 percent in equities, with the rest in bonds, convertibles and REITs. Recent favorite issues: ACE, Citigroup, GM, Harris, Magna International, Mandalay Resort Group, XL Capital.

-- Sometimes the best thing that can happen to a rapidly expanding industry is a massive shakeout. The '90s were telecom's golden era, observes Personal Finance magazine (1750 Old Meadow Road, McLean, VA 22102). "Then investors came to their senses and took what was left of their money away in 2000. The surviving companies have suffered the slings and arrows of telecom's misfortunes, and they're ready to ring again." PF's favorite survivor stocks operate in a wide range of telecom sectors: Avaya, Hutchison-Whampoa, Inter-Tel, NEC, Qwest Communications, Verizon, Vodafone.

-- As a bull market matures, larger stocks, which often have long dividend histories, start to perform better than smaller issues. Standard & Poor's sees evidence of that happening today. "These six dividend-paying companies have above-market yields and are expected to raise their dividends at a healthy rate over the coming year. Each is also ranked five stars (buy) or four stars (accumulate) for superior appreciation potential over the next 12 months: Aqua America, Fortune Brands, General Growth Properties, Pentair, Procter & Gamble, Watts Water Technologies."

-- A presidential win for the Democrats could actually be bullish for the dollar and negative for commodities, says Jeffrey Christian of CPM Group. "This country is addicted to debt, and if President Bush wins again, I think international investors will anticipate bigger deficits and less cooperation on an economic and political basis. All that is negative for the dollar."

-- Foreign stock funds have had a great run recently. Is it too late to get in? "Not at all," says Money magazine. "Foreign stocks don't move in lockstep with U.S. markets. Over the long term, they'll reduce the overall volatility of your portfolio." Money recommends four specific foreign stock funds, all with outstanding performance records and reasonable expense ratios. "The first two are ideal core holdings: Dodge & Cox International Stock and Thornburg International Value. The other two are more adventurous: T. Rowe Price International Discovery and SSgA Emerging Markets."

-- Site of the Week: The Web site www.reitnet.com is a source of REIT information that allows users to view investment analysis of real estate and real estate securities. Some areas are free to users; others charge a fee for access.

Investor's Notebook is a digest of investment opinion from the world's leading financial advisers. It does not recommend any specific investments, and no endorsement is implied or should be inferred. For more information, contact the individual firms cited.

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