The simplest approach to investments has been the mantra of market strategist Carlson. As editor of the newsletter DRIP
[Directory of Dividend Reinvestment Plans] Investor
and author of several books, he has long advocated holding stocks that pay dividends and then reinvesting these dividends back into stock. Here, he offers a new approach to stock investing. According to research on the performance of the stocks that compose the Dow Jones Industrial Average—Boeing, Wal-Mart, McDonald's, Home Depot, etc.—a bad year is likely to be followed by a great year for these stocks. By tracking the stock performance of the companies, investors can then choose which stocks to buy and will be able to buy the stock "low" and sell "high." Carlson explains the research in easy-to-understand language: "Indeed, if you can make successful bets on the Dow's lowest priced stocks (and, conversely, determine what high-priced Dow stocks are pricey and avoid or short them), you should consistently generate index-beating returns." Carlson also offers several compelling reasons why this strategy works, including consistency of performance over various time frames, simplicity, tax advantages and flexibility. Also included are snapshot profiles of all the companies in the Dow. Given the turbulent swings of the stock market over the past few years, most investors now understand there is no single guaranteed approach to investing. However, Carlson's plan is sound and his suggestions for incorporating it into an existing portfolio will let readers easily test it out. (Jan.)
Forecast:
With Carlson's track record from the bestselling
Buying Stocks Without a Broker, this one should sell well, especially if the author receives some national TV exposure.
