Selective Buying Strategies for 1998

With the US stock market experiencing significant gains over the last three years, investors are seeking expert advice on how to navigate the upcoming year. Top-performing portfolio managers from Denver-based mutual fund family leaders, Janus Capital and Invesco, were consulted for their insights on investment strategies and predictions for 1998.

Key Takeaways:

• **Trent May, Invesco Growth Fund**: May anticipates a choppy market in the first half of 1998, but remains bullish on technology stocks like Intel and Microsoft. He expects the S&P 500 to produce single-digit returns for the year.
• **David Corkins, Janus Growth and Income Fund**: Corkins is cautious due to the potential dampening effect of Asian economies on the US market. However, he believes the market will continue upward as long as interest rates remain low, citing Coca-Cola Enterprises, Sealed Air, and Star Banc as good bets.
• **Scott Schoelzel, Janus Twenty Fund**: Schoelzel warns against passive investment strategies like indexing, anticipating volatile market swings in large cap stocks with high valuations. He favors financial, drug, and technology companies like Eli Lilly, Pfizer, and Warner-Lambert.
• **Jeff Morris, Invesco Strategic Financial Services**: Morris sees nothing alarming in the financial sector, anticipating a continued boom in refinancing and consolidation within US banks. He recommends American International Group, Bank of America, and Citicorp.

Statistics:

• **1997 Returns**: Invesco Growth Fund (27.2%), Janus Growth and Income Fund (34.7%), Janus Twenty Fund (29.7%), and Invesco Strategic Financial Services (44.8%).
• **Market Expectations**: Trent May expects a choppy market in the first half of 1998, with single-digit returns for the S&P 500.
• **Intel Performance**: Intel shares have fallen 25% over the past three months, but Trent May expects the company to perform well in the second half of 1998.
• **Sealed Air Stock Performance**: Sealed Air's stock has climbed nearly 300% over two years, with David Corkins remaining bullish on the company due to its product line.
• **Star Banc Corp.**: The company has been surprising Wall Street analysts with impressive stock gains, despite its high valuation in relation to earnings, according to David Corkins.

Sources:

• "Byline: John Accola Rocky Mountain News Staff Writer With the stock market's gains the last three years surpassing most money managers' expectations, what's an investor to do in 1998? Keep buying, but selectively, say top-performing portfolio managers from Denver's mutual fund family leaders, Janus Capital and Invesco."
• "Trent May, lead manager Invesco Growth Fund (1997 return: 27.2 percent). Good bets: Microsoft, Intel, Maxim."
• "David Corkins, Janus Growth and Income Fund (1997 return: 34.7 percent) Good bets: Coca-Cola Enterprises, Sealed Air, Star Banc."
• "Scott Schoelzel, Janus Twenty Fund (1997 return: 29.7 percent) Good bets: Eli Lilly, Pfizer, Warner-Lambert, Schlumberger"
• "Jeff Morris, Invesco Strategic Financial Services (1997 return: 44.8 percent). Good bets: American International Group, Bank of America, Citicorp"