Investing Without Heroes: Money Managers Moving Slowly in Today's Markets
NEW YORKÛÓIf thereÛªs one thing the average investor and the managers of big money agree on these days, it is that the stock market is a tricky and potentially dangerous place to play.1</br></br>For the investor, the answer is simpleÛÓstay away. But what about the money managers, the people -who run pension funds, insurance company portfolios, university endowments and other huge pools of money? How do they survive in the current markets when their clients are constantly churning out dollars that demand investment somewhere? ÛÏWeÛªre moving slowly,Û says Samuel B. Callaway, executive vice president of Morgan Guaranty Trust Co. Callaway runs the biggest trust department at any bank in the country. At the end of 1973, money under the bankÛªs supervision came toÛª $23.4 billion. Although the final total for 1974 hasnÛªt been revealed, Callaway concedes that ÛÏlike everybody else, itÛªs down significantly.Û</br></br>Like most professionals, Callaway thinks stock prices have been pounded down to where they seem very reasonable. But, like most managers, heÛªs not yet ready to pile money into Ûªany market.</br></br>In the rampaging markets of the late 19fi0s, most money managers poured dollars into the stock market almost as soon as they were received. A small percentage was kept in cash to allow some mobility but the idea basically was to cash in on soaring prices. Now the picture has changed sharply.</br></br>ÛÏIt all depends on the customer,Û Callaway says. ÛÏIf itÛªs a strong company in a good cash position, we like to see about 50 to GO per cent in stocks. WeÛªve been dollar averaging but we do it over a period of time, maybe three to six months. We look for strong situations just as we always have, but thereÛªs no hurry. About 25 per cent goes into intermediate-term bonds, always new issues, and the rest is in cash or short-term investments of some kind Û