Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, April 30, 1990 TAG: 9004280019
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
SOURCE: Mag Poff
DATELINE: LENGTH: Long
A: Kemper U.S. Government Securities Fund is a mutual fund that invests primarily in mortgage-backed securities. In other words, it's a Ginnie Mae fund.
A recent issue of Money magazine gave it a grade of A and the top ranking among mortgage-backed securities funds. Kemper U.S. Government Securities has a reputation of being a conservative mutual fund.
The name is somewhat misleading, suggesting investments in Treasuries. Ginnie Maes are not federally insured, but the federal government guarantees payment of the residential mortgages in which the funds invest. The risk is very small.
The fund earned 14 percent last year. Based on the values listed in this newspaper, you are earning more than 9 percent even now. You could not earn much more except in a very risky high-yield fund.
Like all mutual funds, however, the return and the value move up and down with the market. In this case, the fund responds in direct ratio to the direction of mortgage rates. Those have fallen recently.
If you are uncomfortable with the volatility, you will have to accept the lower return of a bank certificate of deposit. You have a good return, however, and it will rise again if mortgage rates go up.
\ All about Krisch
Q: Please discuss Krisch Inns stock. They are acquiring hotels all the time. Any enlightenment will be appreciated.
A: The list of companies under the heading of "Virginia stocks" that appears in this newspaper is a compilation of local companies of special interest to our readers. It is not a stock exchange.
Shares of Krisch American Inns Inc. are traded over the counter on the National Association of Securities Dealers Automatic Quotation System (NASDAQ) using the symbol INNS.
The Roanoke-based company's recent annual report for 1989 said it had 5,916,666 average shares outstanding in the hands of 987 stockholders.
Last year's high bid for the stock was $2.56 a share. The low bid was $1.
According to the annual report, Krisch American Inns Inc. is in the business of acquiring, developing and owning hotel properties.
As of March 20 this year, the company owned or leased 578 hotel rooms in Virginia, Delaware and Maryland. Its only hotel in Western Virginia is the Ramada Inn at Wytheville.
It also had a 20 percent limited partnership interest in 10 hotels with 1,751 rooms in Alabama, Missouri and Texas.
The company is developing a 300-room resort at St. Thomas in the U.S. Virgin Islands.
The hotels, which operate under a variety of franchises, are managed by an affiliated hotel management company, Krisch Hotels Inc. The latter company is privately held.
Krisch American Inns was founded in May 1986 and, according to the annual report, has lost money each year because of the expense of developing hotel facilities. Last year's loss was $1,050,235 or 18 cents a share. The company said it expects to lose money this year as well.
Paying up
Q: If the government takes over a savings and loan, is it true that they allow depositors two weeks to withdraw their funds?
A: In such an eventuality, federal authorities pay off depositors (up to the $100,000 limit) in a week or two. You would want this to happen quickly because the government stops paying interest when an S&L is shut.
Figuring the odds
Q: I put $95 a month into the lottery. Where will be a better place to put it?
A: If you are just beginning to build financially, you will have to start in a regular savings account at a bank or thrift.
The key to financial security is regular deposits. It's less fun than scratching tickets or picking numbers, but it's a sure bet.
Before a year is out, you will have enough to transfer into a money market savings account paying a higher rate. Banks that pay market interest at the $1,000 level are designated by an asterisk in the interest rate chart that appears in this newspaper every Wednesday.
Use that account to accumulate an emergency fund of three to six months' salary. Where you fall in that range depends on the number of your dependents.
Any amount after that can go into several different types of investments, with the mix depending on your age, circumstances and temperment.
The odds of earning a gain on fixed-income investments, such as bank CDs, are 100 percent.
As a lottery player, though, you will probably enjoy the stock market even more. Start in a mutual fund and branch into stocks over time.
by CNB