Don't Kill Your Cash Stash - Invest

Kofi Bofah

Philosophy .22

You want to learn about money? Step into my office.

Work, save and invest.

If you have lots of dough sitting in the bank, you are killing Ben Franklin softly. Inflation burns money that isn't being put to work. Start making some moves to stack up more loot.

Stocks are where it's at. Bonds are safe but returns are minimal, the same holds true for CDs, and leave mutual funds alone. Stocks are the easiest way to make money (legally) by doing nothing.

Learn the basic lingo of stocks:

When people ask how the market is doing, they are talking about the Dow Jones industrial average. Thirty corporations compose the DJIA and they usually run the show in their respective industries. Most household names are represented, including Wal-Mart, Coke, IBM, Exxon-Mobil, Microsoft, Mickey Mouse (Disney) and Mickey Dees.

A momentum investor is a stock groupie. These people dump whatever is out of favor, and hop on the hottest item, sending prices through the roof or into the basement. Use these investors to your advantage.

Note the trends of the business world and move accordingly. The economy is still a monster, but it is slowing.

Alan Greenspan's work to raise interest rates to battle inflation increases the costs of borrowing - making it difficult for businesses to raise loot.

A weak European currency (euro) gives multinationals a double whammy. Products sold in Europe sport high prices, reducing demand. Next, goods that are sold in Europe leave firms with chump change after currency exchange.

Oil prices are sky-high, further eating into corporate profits.

Money ain't flowin' like it used to. The Dow is down a couple points this year, contrasting with a normal 11 percent rise. Bargain hunt carefully in this market.

Diversify across sectors to stay getting paid.

Tech stocks can either build your dream house or send you packing to the poor house. Stable companies won't make you get rich quick but they will maintain your sanity.

Folks need information, and they need it fast.

Optics move the Net at light speed, so check this sector. Nortel Networks and Cisco Systems hold the fort up top. Cisco has been flat for the past six months and might be a good buy or a dinosaur. Nortel's got the goods. Seventy-five percent of Internet traffic moves on Nortel infrastructure. The fiber optics leader might be a good long-term buy now, as it got punished last week.

Ciena is my baby. The telecommunications equipment maker's stock has appreciated faster than the speed of its lighted networks. One G dumped into Ciena last January would have emerged as 10 last September.

Supplying the parts for the Cienas, Ciscos and Nortels of the world is JDS Uniphase. Last week, The Phase came to the rescue of the battered technology sector with a dynamite earnings report. Uniphase will bolster its business with the acquisition of laser maker SDL. Remarkably, an investment of $10,000 in JDS five years ago would have yielded a nice gain of $1.5 million.

Load up on some computer applications picks. Wall Street darling Sun Microsystems is the dot in dot com. Surf the Net, note the word Java, think of Sun and think of gettin' paid.

EMC looms large. Remember Einstein: Energy = Mass x Speed of Light2. This leader in data storage has been the stock of the decade. Since '90, the price has soared by 84,000 percent.

Dabble with software. With the beef in this sector, all players must be on point. Microsoft is a machine, but legal troubles plus those stupid Bill Gates commercials have caused the stock to fall from $119 a share to $65.

Database maker Oracle is huge. Still, CEO Larry Ellison is a hater, sick of playing second fiddle. Larry's the second richest man in the world behind Gates, Oracle is no Microsoft, and one of his ex-employees, Tom Siebel, is the toast of Wall Street.

Siebel Systems rocks, and Tom continues to kick his old boss' butt out in Silicon Valley. Siebel rules relationship management software, a market Oracle wishes to control.

Behind the scenes are semiconductors. Intel has taken a beating and is a nice long-term buy right now. Broadcom and PMC Sierra control networking chip technology.

Measuring the effectiveness of technology is instrumentation. Newport has been a champ as five grand in the 'Port last January became 200 Gs in September.

Add a financials play. Morgan Stanley Dean Witter is a Wall Street powerhouse, Citigroup is huge, and MBNA is growing fat, benefiting from every Schmo that charges up a storm and pays the minimum balance every month!

With the deregulation of energy, utilities got it going on. Enron, Duke Power, and Dynegy are dolls.

Drugs will relax any investor when the tech sector is getting whacked. Take some of Pfizer, Merck or Eli Lilly and call me in the morning.

Lastly, a Multinational Kahuna will anchor your portfolio. General Electric is golden. GE plans to acquire Honeywell, strengthening its aerospace component business, making life a bit easier for Boeing.

Also, don't sleep on Minnesota Mining and Manufacturing (3M). St. Paul's diversified manufacturer does it all from Post-It notes and Scotch tape to medical supplies.

But it's getting late, and I must end our meeting. Sorry to leave you hanging, but it's on you now. I presented some names, so you have to put in the research. I am reluctant to lead you by the hand because money is a personal thing.

Go get those dollars.

Kofi Bofah is a junior business administration major from Silver Spring, Md. Reach him at bofah26@email.unc.edu.