THOMAS S. BROWN, BUSINESS WRITER
January 4, 2003; Page 08A
January is the traditional time of year for vowing to live a healthier life. Financial planners say it's also a good time to think about living a wealthier life.
Here's a sampling of what several money specialists in the Volusia-Flagler area are recommending for the new year:
CREDIT CHECKING
Tanya Boggs, Volusia-Flagler director of Space Coast Credit Union, Daytona Beach: The first of every year is a good time to review your credit report. Everyone, regardless of his or her income level, should order a copy of his or her credit report and have someone experienced in finance review it.
"You might be surprised to find errors, omissions, and, in some cases, fraudulent accounts opened in your name by another party," Boggs said.
Space Coast staffers are willing to help people identify discrepancies in their credit reports, but, she said, "we can't order your credit report for you. You have to do that yourself by contacting one of the big three in the credit reporting field."
The three agencies are TransUnion (800-888-4213, www.transunion.com), Experian (888-EXPERIAN, or 888-397-3742, www.experian.com) and Equifax (800-685-1111, www.equifax.com).
A cautionary note: Many Internet-based companies are offering "free" credit reports, but the fine print discloses consumers who accept also are signing up for some form of credit card insurance or credit scorekeeping costing $50 to $100 a year.
TAX CREDITS
Gloria Sutton, Internal Revenue Service in Jacksonville: More working families may qualify for the earned income tax credit on their federal income tax returns this year because of recent changes in the law. The credit is worth about $2,500 to $4,000 for taxpayers with children, and less than $500 for childless low-income people.
This year, the government no longer requires people claiming the credit to report certain types of nontaxable income, such as 401(k) contributions, day care provided by employers and military combat pay.
Thus, it will be easier for some families to stay under the income limits that govern the earned income tax credit.
Those ceilings are $11,060 for a childless, single taxpayer; $29,201 for a single person with one child, $30,201 for a couple with one child, and $34,178 for a couple with two or more children.
JUNK BONDS
Lewis Slaughter, Slaughter, Bundza & Associates of Ormond Beach: This may be the year to take a closer look at high-yield bond funds, also known as junk bonds, as an investment option.
"Generally, these funds are returning 8 to 9 percent or a little higher," Slaughter said. "But don't try finding the individual bonds. Buy the bond mutual funds, instead."
MARKET TIMING
Richard F. Posson, DeLand futures analyst: Most investors simply sell too late and hold on too long.
In the current volatile market, people should be prepared to buy and sell stocks in a 3- to 8-month timeframe, rather than the 2- to 5-year period that worked in the bull market of the 1990s.
"You can't get away from market timing. Deal with it," Posson said. Investors should review their holdings at least once a week, rather than once or twice a year, he added.
A believer in using price cycles as guides for investment strategy, Posson expects the Dow industrials index to show modest improvement this year, perhaps topping 9,000. However, if the Dow drops below 7,197, he said that could rattle investors and trigger a major selloff, plunging the Dow below 6,000.
STOP LOSS ORDERS
Joseph Meyer, Ormond Beach investment adviser: "We're going to have a double-dip recession." Meyer recommended consumers defer major purchases and pay down their debt until conditions improve. "Take a fully defensive position in the market," he said.
When buying a new stock, give your broker a stop-loss order so if the price dips, you unload the stock and lose no more than 10 percent of what you invested, he advised.
Concentrate on high-quality dividend-paying companies, and be wary of technology issues, he added.
Meyer expects another round of large-scale layoffs in coming months, he said. "We also may start to see interest rates rising again."
Those twin blows would probably depress the Dow to the low 7,000 range, putting it below the low levels posted last October, Meyer predicted.
The Dow lost about 555 points during December but began the New Year with a 265-point rally that put it at 8,607 as of Thursday.
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