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MONEY SMALL INVESTOR INDEX: INVESTORS ENJOY BEST JANUARY IN FIVE YEARS

MONEY SMALL INVESTOR INDEX: INVESTORS ENJOY BEST JANUARY IN FIVE YEARS
 /ADVANCE/ NEW YORK, Jan. 12 /PRNewswire/ -- The typical individual investor earned 4 percent -- or $1,728 -- over the past four weeks, according to MONEY magazine's Small Investor Index. Those returns are by far the highest New Year's gains of the past five years.
 Stock prices typically advance strongly from Dec. 15 through Jan. 15, a phenomenon that is commonly known as the January effect. Yale Hirsch, author of the Stock Trader's Almanac, explains why this happens: "Investors sell depressed stocks in mid-December to realize capital losses for tax purposes, and then bargain hunters start moving in." Their buying usually lifts the entire market during the first week or two of January.
 This year's 4 percent gain for the Small Investor Index was more than double the 1.5 percent of early 1989 -- the second-best return from the January effect in the past five years. Small-company shares, which generally benefit most from the phenomenon, again outpaced blue chips this year, 15.6 percent to 9.6 percent.
 Hirsch notes that when the overall market finishes January in the plus column, stocks almost always end the year with a gain. That pattern has held for 25 of the 26 years with up Januarys since 1950.
 Also, many analysts say that with yields on certificates of deposit and money-market funds below 5 percent, compared with 7 percent or more a year ago, small investors should keep at least 50 percent of their money in top-quality stocks or equity mutual funds. Says Hirsch: "History is on your side if you buy stocks now."
 Last week, the Small Investor Index, which tracks the typical individual investor's holdings, rose $270 to $44,813. Stocks gained $208, and bonds added $40. Certificates of deposit and money-market funds contributed $15.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 101.83 101.22 85.62 +0.61% +18.94%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 103.24 +0.14% +37.13%
 ASE/OTC 110.82 +5.69 +71.25
 Equity funds 105.29 +1.71 +38.48
 Bonds:
 Taxable bonds 100.55 +0.24 +14.85
 Municipals 101.20 +0.65 +12.96
 Bond funds 100.79 +0.43 +16.98
 Short-term assets:
 CDs 100.17 +0.09 +6.05
 Cash 100.16 +0.08 +5.08
 Other:
 Real estate 100.47 +0.14 +2.22
 Gold 102.42 +2.55 -6.83
 Dec. 27, 1991 equals 100
 Where average small investors have their money now
 Current Year Ago Current Year Ago
 NYSE 20.06% 20.87% Bond funds 5.16% 4.11%
 ASE/OTC 6.34 6.59 CDs 18.99 21.25
 Equity funds 4.56 3.64 Cash 22.71 21.35
 Taxable bonds 16.49 16.44 Real estate 0.79 0.76
 Municipals 4.34 4.41 Gold 0.57 0.58
 Sources: Bank Rate Monitor, IBC/Donoghue's Money Fund Report, the Federal Reserve, Investment Company Institute, Lehman Bros., Lipper Analytical Services, Merrill Lynch, Morgan Stanley Capital International, National Association of Real Estate Investment Trusts, Prudential Asset Management, Standard & Poor's, Robert Stanger & Co., World Gold Council.
 -0- 1/13/92
 /NOTE TO EDITORS: This material is also available in printable form from AP GraphicsNet and Access services for graphics and tables (under the file name MoneyIndex) and from PR Newswire for full text./
 /CONTACT: Jordan Goodman of MONEY, 212-522-3618, or Patti Straus of MONEY public relations, 212-522-2695/ CO: ST: IN: SU: ECO


GK -- NY051 -- 8697 01/10/92 14:56 EST
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Date:Jan 10, 1992
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