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Sunday, June 2, 2002

Laredo Morning Times

PAGE 5D

Local News

Market Talk

Diversify to reduce risk

BY ARCHIE RICHARDS Michael writes that his 74year-old mother-in-law recently inherited 10,000 shares of Torchmark and 1,000 shares of Waddell & Reed. Social Security is her only source of income. She's worried about the stock market. What should she do? S h e s h o u l d d i v e r s i f y, Michael. Her risk of loss is higher than it needs to be. Like all A. RICHARDS s t o c k investors, she has market risk. If the market falls significantly, her two stocks would probably fall with it. Market risk she should accept. The economy is not falling apart. With improving productivity from new technologies and 3 billion people released from communism only a decade ago, the world markets will recover. I expect the U.S. stock market to rise slowly at first and faster as time goes on. But your mother-in-law also has "specific" risk. Even if the market goes up, her two stocks may fall. Specific risk she doesn't need. Her stocks should be sold. The taxes would be insignificant. The income-tax costs of the two stocks are the values at the death of the person who owned them before. The death having occurred recently, the date-of-death values are probably close to the current values. Your mother-inlaw would pay little or no capital gains tax when she sells them. I suggest she diversify to index funds. An index measures the performance of a certain kind of security. For example, Standard & Poor's keeps track of an index that reflects the performance of America's 500 largest stocks. As those stocks rise or fall by a certain percentage, the S&P 500 Index changes by the same percentage. An index fund endeavors to track an index by holding the very same stocks that are included in the index. An S&P 500 index fund, for example, holds all 500 stocks chosen by Standard & Poor's for its index. Index funds don't try to beat the index they're following; they just try to equal it. The operating costs of such funds are very low. So are the capital gains distributions. I recommend that your mother-in-law acquire Vanguard index funds of bonds, real estate, domestic stocks and international stocks. (See www.vanguard.com or call (800) 662-7447.) The following funds and proportions I consider ideal: -- 20 percent: The LongTerm Bond Index Fund -- 20 percent: The Real Estate Investment Trust (REIT) Index Fund -- 30 percent: Total Stock Market Index Fund -- 30 percent: Total International Stock Market Index Fund By spreading her money among different investment groups, weakness in one is partially offset by strength in another. The risk of the whole is reduced. Results will improve if she rebalances the portfolio every 13 months. (Holding for more than a year results in longterm capital gains, which reduces taxes.) Any fund whose percentage of the entire portfolio is then 30 percent higher than the percentage originally assigned to the fund should be partially sold. For example, if a fund that started at 20 percent of the portfolio is now above 26 percent, it should be cut back to 20 percent. The proceeds should be added to funds that have underperformed. Rebalancing causes sales at relatively high prices and purchases at relatively low prices -- the opposite of what most investors do. The dividend payouts from all four of the index funds above would be 2.6 percent. Your mother-in-law's portfolio should amount to about $430,000. Her income would be $11,000. The dividend payouts from the bond and REIT index funds are fairly high. The payouts from the other two funds are low. If she draws her dividend income primarily from the bond and REIT funds, the 20, 20, 30, 30 percentages would be thrown off. She should therefore request Vanguard to pay out distributions from all four funds -- 2.6 percent of the value of each. If your mother-in-law needs income higher than 2.6 percent, she should take it. Withdrawals of even 5 percent of each fund would still enable the portfolio to grow. If she has difficulty with all this, Michael, you could help her. Or you might seek the assistance of an accountant. By adopting this diversified investment program, your mother-in-law's financial future would no longer depend on just two companies. Her money would be invested in over 5,000 of the world's business enterprises. Her longterm gains would probably improve. Her risks would certainly diminish. (Email to [email protected], visit www.archierichards.com or write to Archie Richards, 5777 Century Blvd, Suite 700, Los Angeles, Calif. 90045. )

Garcia honored with Golden Apple award

Alberto Arturo Garcia, fifth grade teacher from Leon Daiches Elementary School, is the 2002 Golden Apple recipient of Delta Kappa Chapter of Alpha Delta Kappa. Garcia was chosen out of 58 nominees from both school districts and Laredo Community College by judges from St. Phillips College Math and English Department. Garcia is involved with most of the school's activities, extra curricular activities and participates in community projects. He has very high expectations for his students. For several years, he has been involved with the Make a Difference Jumpa-Thon, which helps different agencies in the community. "He instills love and compassion on the students for the less fortune," his mother, Minerva R. Garcia, said.

Times courtesy photo

WINNER: 2002 Golden Apple recipient Alberto Arturo Garcia, fifth grade at Leon Daiches Elementary, and Grace Rathmell, school principal.

Texas Cooperative

Mosquito management

BY GEORGE L. GONZALES Extension agent Due to the recent rains in our area, local home owners continue to express concern about mosquitoes in their yards and inside their homes. It is the season for mosquitoes to invade yards and seek out h o s t s . G.L. Gonzales M o s q u i t o s are one of the most important insect pests that affect the health and well-being of man and his domestic animals. Because of the variety of environmental conditions favorable to the development of mosquitoes, vast annoying populations can occur anywhere in Texas. Female mosquitoes produce a painful bite during feeding and can transmit a number of disease-causing organisms to man and animals. Loss of property values and animals' production efficiency often can be traced to mosquito occurrence and feeding. Mosquitos are known to transmit several important disease-causing organisms to man and animals. Encephalitis, dengue, filariasis, yellow fever, and malaria have affected man in mosquito infested areas throughout history. Encephalitis and occasional cases of malaria remain as important mosquito-borne diseases in Texas. Heartworm in dog is also a common mosquito-borne disease in the humid eastern area and coastal plains of Texas. Mosquito control is important for pet owners because they transmit heartworm in the dog. Heartworm can cause severe circulatory problems in dogs and produce symptoms such as coughing, labored breathing and general loss of vitality in advanced stages. Because of the impracticality of protecting dogs from mosquito feeding, the most effective means of controlling heartworm is to prevent worms from reaching the adult stage. Veterinarians can prescribe drug treatment to protect pets during the mosquito season. Effective mosquito control is often a complex, expensive task, frequently requiring the cooperative efforts of individual homeowners as well as such groups as industry, agriculture, state and local governments. Applications of methoxychlor spray to vegetation, tree trunks and walls of buildings and catch basins will effectively control certain adult mosquitoes. Commercially available insecticides and aerosol bombs control adult mosquitoes in the home. Properly maintained window screening and use of insect repellents on the skin and clothing can provide considerable protection against mosquito bites. Applying insecticides such as malathion, diazinon or dursban in a spray form to areas where mosquitos rest is highly effective. Granular applications are not very effective. You should eliminate containers such as old tires, buckets, cans and bottles that collect and hold rain water. Also, discard old pieces of plastic that can collect water and become good breeding sites for mosquitos. For further information on mosquito control, Texas Cooperative Extension has publication (L-1744) Mosquito Pest of Man and Animals available to the general public upon request, you may also call (956) 721-2626 for additional information . Range/Wildlife Management Field Day The Webb Soil & Water Conservation District, USDA Natural Resources Conservation Service, Texas Cooperative Extension, Texas Mexico Border Coalition CBO and Rio Bravo RC&D are sponsoring a Range/Wildlife Management Field Day on Wednesday, June 12, from 8:00 a.m. - 2:00 p.m. at the IBOC Hunting Camp in Aguilares, Texas. A noon meal and refreshments will be provided courtesy of International Bank of Commerce. Two pesticide applicator licence CEU's will be awarded. Program is free to the general public and related publications will be available to participants. To pre-register for this seminar please call Flavio Garza, Webb County Natural Resources Conservation Service, at 723-6643 ext. 3; Zaragoza Rodriguez at Rio Bravo RC&D at 765-6911; or George L. Gonzales, Webb County Extension office at 721-2626. Any program participant needing special accommodations is asked to call the Extension Office a week in advance to make arrangements. Basic Horse Management Clinic Texas Cooperative Extension Office in Webb County and the Extension Agriculture/Natural Resources Committee - Leo Rodriguez, chairman, will be sponsoring a Basic Horse Management clinic on Thursday, June 13, from 10:00 a.m. - noon at the Laredo International Fair & Exposition Show Arena. Topics to be covered include hoof care, nutrition, teeth care, exercise, horse theft awareness, first aid, vaccination and deworming, horse health (Coggins) and question and answers. Program is free to the general public and related publications will be available to participants. To pre-register for this seminar call the Webb County Extension office at (956) 721-2626.

Latin Music

A new Ayala emerges on music scene

BY RAMIRO BURR Most kids aren't sure what they want to do when they grow up. But when your father is noted producer Jose Luis Ayala and your uncle is norteño legend Ramon Ayala, the choice comes naturally. "I decided to go into the music business when I was three," Estruendo drummer Jose Luis Ayala Jr. said recently. "My family inspired me to dream of playing drums and of traveling all over the United States and Mexico." The new group, based in RAMIRO BURR Hidalgo, got a major boost right out of the chute, thanks to those family ties. Ayala's father produced the band's August 2001 debut, "Rumbo a las Estrellas," and Ramon Ayala let the group open for him during a five-month stretch last year. Estruendo (the name means "lots of noise") is made up of young musicians with a fresh sound that blends the danceable pop/norteño influence of Limite with the romantic Tejano/norteño sound of Intocable and Iman. Signed to the aggressive Univision Music label, the group is led by singer Naishla Sanchez, 18, whose pleasant, perky vocals on Estruendo's tropical-flavored cover of "Mmmbop" at times sound eerily similar to Zac Hanson's. "Rumbo" gets off to an impressive start with the inspiring "Debo Buscar," which combines pop elements such as jazzy chords and catchy harmonies over an organic accordion and bajo-sexto foundation. The tune was written by bass player Rodolfo Ramirez. "Y Que Voy a Hacer?" is the first single and an instant winner, with three-part harmonies, catchy chorus and Jorge Alberto Lugo's sunny accordion hooks. The cumbia was written by Jose Luis Borrego, who's penned some of La Mafia's biggest hits. Another cumbia, "Perdon," is the current single. The song has been widely covered by artists including Vicente Fernandez. It's getting moderate airplay on Tejano and regional Mexican stations. Estruendo's version starts off with an original tango-style intro and uses three different melodies sung in the round, simultaneously. Unfortunately, all three parts were mixed at nearly the same volume, leaving it without a distinct lead melody. Jose Luis Ayala Sr., who's produced Intocable, Emilio and Bobby Pulido, provides insight and direction: "He tells us how to make music sound a lot better and he helps us choose the songs," the younger Ayala said. He added that he's also influenced by top young norteño romantics, including Iman, Solido, Duelo and Siggno. However, Estruendo's rhythmic cumbias and occasionally sassy lyrics give it more punch than its sleepier Valley counterparts. The other members of the band are Alfredo Guillen, bajo sexto, and Edmundo Torres, percussion. TRANSITIONS: Last week, the Latin music world lost a few memorable figures. In San Antonio, longtime Chicano bluesman Randy Garibay, 62 succumbed Jan. 23 after a long battle with cancer. He was the leader of the band Cats Don't Sleep, and also an integral part of the Las Vegas-based, San Antoniobred Dell-Kings/Los Blues bands. On May 26, Oscar Florentino Tellez, 56, one of Tex-Mex's best bajo sexto players, was killed Sunday in a one-vehicle rollover outside Cotulla. In a notable career, Tellez played with Flaco Jimenez, the Texas Tornados, Mingo Saldivar and others. Longtime Tejano DJ Gilbert G. Quintanilla, 39, died of pneumonia May 22. GQ, as he was widely known, enjoyed stints at radio stations in Houston, El Paso and Brownsville but it was his key post at San Antonio's KXTN in the early `90s that he will be remembered for. At the peak of Tejano's `90s renaissance, KXTN became the music's flagship station when it not only switched from AM to FM, but also reached the city's No. 1 position in 1994. In related news, Houston has lost longtime Tejano station KQQK-FM. Last month, Liberman Broadcasting Inc. purchased KQQK from El Dorado Communication for $30 million. At midnight on May 19, station officials made a small switch, changing the format from Tejano to regional Mexican. In the larger sense though, it was a fundamental change in Tejano's music fortunes. For more than a decade, KQQK had been a key player in Tejano's early `90s fantastic rise. But in recent years, Tejano's bright flame has dimmed considerably, as audiences, especially the younger fans, have flocked to rock, pop, and hip-hop music. (Ramiro Burr covers the Latin music scene each week. Burr is also the author of "The Billboard Guide to Tejano and Regional Mexican Music," on Billboard Books. For questions or comments call Burr at (800) 5551551, ext. 3429, or e-mail to [email protected])

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