The Daily Dow
Monday, August 18, 1997
by Robert Sheard

LEXINGTON, KY. (Aug. 18, 1997) -- Reversing the Sheard Effect today, the Dow Jones Industrial Average regained about 40% of Friday's loss while I was out of town. If you missed Friday's report, I mentioned that virtually every time I've left town in the last three years we've suffered at least one drop of greater than 100 points. Get your Sheard Effect here; don't let me leave home without it.

It's been so long since we've had a hefty correction, though, it's hard to tell when we really see one. Many market watchers claim it's not a correction until we're down 10%, so by that definition, what we saw last week is simply noise. As you can see on this chart, we've only seen a drop of 6.8% on the Dow since its closing high of 8259. Whether today's bounce is just that -- a bounce -- or one of the proverbial dips all bulls should use to buy more is impossible to tell, of course. The correction we started last week could well continue. Or not. (Do you get the idea that I don't know what's around the next corner? Good. Neither does anyone else!)

Of course, the short-term players are anxiously waiting for this week's Federal Reserve Open Market Committee meeting to see if Greenspan & Co. will boost short-term interest rates. What's it all mean for Dow investors? Absolutely nothing!

If your time horizon is years (decades?) down the road, you're wasting energy and time worrying about what the market does over the next few days, weeks, or months. Write this down in indelible ink: we're going to see many corrections in the next decade. Some will be severe. Ignore them all and keep saving and investing for the long term. It's the only Foolish plan for long-term wealth building. Enjoy the ride along the way if you find the ups and downs exhilarating, but don't let the short-term movements influence your decision making. Fool on!

(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. ________________________________

Stock  Change   Last
--------------------
T    +1  7/16  40.50
GM   +1  5/16  61.00
CHV  +   7/16  77.63
MMM  +   1/4   91.75

           Day   Month    Year
        FOOL-4   +1.92%   2.09%   8.12%
        DJIA     +1.41%  -5.10%  21.01%
        S&P 500  +1.30%  -4.38%  23.19%
        NASDAQ   +0.48%  -1.52%  21.57%

    Rec'd   #  Security     In At       Now    Change

   1/2/97  153 Chevron       65.00     77.63    19.42%
   1/2/97  120 3M            83.00     91.75    10.54%
   1/2/97  179 Gen. Motor    55.75     61.00     9.42%
   1/2/97  479 AT&T          41.75     40.50    -2.99%


    Rec'd   #  Security     In At     Value    Change

   1/2/97  153 Chevron     9945.00  11876.63  $1931.63
   1/2/97  120 3M          9960.00  11010.00  $1050.00
   1/2/97  179 Gen. Motor  9979.25  10919.00   $939.75
   1/2/97  479 AT&T       19998.25  19399.50  -$598.75


                             CASH    $857.10
                            TOTAL  $54062.23