Cheers & Jeers - personal finance

Kiplinger's Personal Finance Magazine, Dec, 1999 by Kristin> Davis

We cast our vote for the year's highs and lows in personal finance.

JAPAN ON A ROLL

Land of the Rising Stock

Investors in Japanese markets have finally been rewarded for their patience. With the Nikkei exchange up 27% through September 30, sector funds such as Fidelity Japan Small Companies and Warburg Japan Small Company have posted year-to-date returns in the neighborhood of 175%, bringing their three-year average returns to about 26% annualized.

But that may be small consolation for those investors who have hung on longest. Of the Japanese sector funds that have been around five years or more, most still have a five-year annualized return of less than 10%--despite this year's big price run-up.

FLOSS YOUR WAY TO WEALTH

Need a Loan? Smile!

To determine whether you're a good loan risk, perhaps your banker should look at your gums instead of your credit report. After examining the dental histories of 1,400 adults, researchers at the State University of New York at Buffalo and the University of Michigan concluded that stress over financial matters doubles the risk that you'll develop gum disease.

Writing in the July issue of the Journal of Periodontology, the scientists state that "of all the daily strains investigated, only financial strain was significantly associated with greater attachment loss and alveolar bone loss"--both signs of gum disease. The risk of severe periodontal disease was diminished, however, among those financially stressed individuals who had "adequate coping behaviors." So if your checkbook won't balance, just take a deep breath--and floss.

NO DEBIT ABOUT IT

And Click `Buy' When You Want to Sell?

Credit Charles Schwab & Co. with the head scratcher of the year. Last summer, customers with a Schwab One investment account received a statement stuffer touting the benefits of the account's Visa debit card. Included was this important tip: "When offered a `debit' or `credit' option at Visa locations, choose `credit' to make the purchase with your Schwab One Visa debit card."

Huh? No, it wasn't a misprint, and, yes, there is an explanation. Schwab's card is an "offline" debit card, which means you authorize a transaction by signing a receipt (as you would with a credit card) and the money leaves your account within a couple of days. Instead of entering your personal identification number, which provides a vendor instant access to your account, you press "credit" to get the receipt.

Got that? Give yourself credit.

PIKACHU EVOLVES

This Pokemon Play Paid Off

Kids who wheel and deal in Pokemon cards--the trading-card craze featuring Japanese "pocket monsters" who star in their own TV series, video games and now a movie--consider themselves lucky if they land a coveted Charizard, valued at $30 or more. But even a first-edition Charizard pales in comparison with the money you could have made by getting in on the ground floor of 4Kids Entertainment (KIDE, Nasdaq), the company that holds exclusive licensing rights for Pokemon merchandise outside of Asia. If you had invested $1,000 in the stock at its low of 96 cents per share on October 8, 1998, your stake would have grown to more than $39,000 when the share price hit $37.75 on September 9.

GETTING OFF THE GROUND

This IPO Grew Faster Than Jack's Beanstalk ...

Brocade Communications' stock shot up from $19 to $209 a share in its first four months of trading--a return of 1,003% that made it the best-performing IPO through the third quarter of the year. Brocade (symbol BRCD, Nasdaq, recent price $230) is the leading manufacturer of what are called fibre channel switches, which help companies manage vast amounts of data more efficiently. "We were surprised at how fast the investment community understood the potential of our company," says Mike Byrd, Brocade's chief financial officer.

While This One Toppled

Insurance Management Solutions Group (INMG, Nasdaq) sank from its offer price of $11 a share in February to $3 on September 30, a 73% loss. When property insurers want to outsource administration of claims, they turn to companies like Insurance Management, which specializes in the flood-insurance market. The company also earns fees from mortgage lenders for assessing whether properties lie in a flood zone, and earnings had receded as mortgage refinancings slowed.

NO ROTTEN EGGS YET

Banks Draw Cheers, Jeers and Customer Sneers

In an effort to repair their tarnished public image, some financial institutions actually went out of their way to be nice to their customers this year. PNC Bank pays its depositors $5 if they have to wait in a teller line for more than seven minutes, or if they must call more than once to resolve a problem. And Schwab began offering its best customers a cash-management account, called Schwab Access, that includes free checking and ATM use, rebates on ATM surcharges, overdraft protection and money-market yields on idle funds.

But other banks never learn. A couple of low points in this year's deluge of high bank fees: Providian National Bank levied a 5% cash-advance fee on its Aria Visa Persona card (on top of an interest rate of 23.99%). And Bank of America and First Union initiated a $10 fee if you want to close an account.