Word: stockely
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Dates: during 1970-1979
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Still, the split represents a considerable shift in philosophy for a management that used to pride itself on having one of the highest-priced stocks around. Though IBM has declared six other splits in the past 20 years, they have been too modest (on the order of 5 for 4 or 3 for 2) to bring the price out of the stratosphere. But next year small investors are expected to seize the opportunity to buy in at Depression-era prices. As an extra inducement, IBM last week boosted dividends by $2.24 to an annual rate of $13.76 on the present...
...Assuming Bush substantially cuts the guaranteed benefits paid by the government each year to retirees (he has so far avoided actually saying he would do this), he can reduce the long-term cost of the program. And if the stock market continues its historical rate of return of 7 percent a year (or even if it gains a more modest 4 percent a year), such cuts would be painless because most beneficiaries would retire with more money than they would otherwise receive under the current system. Giving workers private accounts should also help boost the currently dismal national savings rate...
...gamble If stocks do not continue to rise (a very real possibility considering how high current stock prices are relative to company earnings), workers would be stuck with lower benefits. If large numbers of retirees lose money in the market, there will be pressure on the government to bail them out, forcing a future administration to choose between precipitating a fiscal crisis and ignoring the struggling elderly. Even if the market stays strong, some people are bound to retire and cash out their holdings in a bear market (historically, nearly one out of every four years has showed negative stock...
...benefit to ensure that more seniors do not fall into poverty. Bush vows to preserve the existing safety net for survivors and disabled workers but, so far, he does not guarantee a high enough safety net for poorer workers, or for those who do not fare well in the stock market...
...keeps seniors from falling into poverty, gradually raise the retirement age to 70 (which could cut the program's projected deficit by two thirds) and allow workers to invest a sixth of their payroll taxes, as well as additional voluntary contributions (possibly matched by government dollars), in low-risk stock or bond funds. Such a plan, says Donald Marron, CEO of Paine Webber and chairman of the bipartisan National Commission on Retirement Policy, "doesn't break the budget, lifts more elderly out of poverty and makes everyone an owner of the American economy...