Missed the Bull Market? Not So, Says Acampora

If the stock market's record run has left you either stunned or feeling left out, one of Wall Street's leading prophets of prosperity has a message for you:

It's not over, and it's not too late.

Last Friday, the Dow Jones Industrial Average set another record close, an almost routine feat this month. In the past 10 weeks it has surged a stunning 21 percent.

And with the Dow looking at 8000, the question for many investors is, "How do I get a piece of this action?"

If you haven't so far, you're not alone. Most of the gains have come in the big, blue-chip stocks - the IBMs and General Electrics - that populate the Standard & Poor's 500 index (a broad measure of stock market performance).

Most stock mutual funds, at least 90 percent, have sat out this rally. Their average gain: a skinny 14 percent this year, versus 21 percent for the S&P 500.

There may be more to come. Here's what Ralph Acampora, market strategist at Prudential Securities, has to say:

The Dow will soar to 8700 by 1998 and 10000 by next June. And putting on his binoculars, Acampora zooms in on a Dow of 18500 in nine years.

"The market is broadening out, with some secondary stocks" jumping on, he says. "There's just a lot of room for this market to expand," Mr. Acampora insists.

Don't take these forecasts as gospel. Your own investment strategy should focus on your own goals.

But Acampora's projections are not as wild as they may seem. Last February, he called for the Dow to pass 7600 in mid-1997 and close above 8250 by year's end.

He is not the only bull in the paddock.

"The outlook [for stocks] is still favorable," said Eric Miller, chief market strategist at Donaldson, Lufkin & Jenrette Securities in San Francisco.

He notes both a decline in long-term interest rates and a consensus that the Federal Reserve will not raise short-term rates when it meets July 1-2.

With low rates, stocks of banks and financial service companies have performed well, and experts think they may ride the market higher.

If you invest through mutual funds and believe the projections of a higher market, experts see two possible strategies - or a combination - to catch it.

Since most of the gains have come from the S&P 500, a mutual fund that tracks it offers a direct route to the top.

Index funds used to be one of the best kept secrets of investing, largely because investors constantly looked for funds that would beat the market. Index funds just try to match it.

But while many funds beat the market one year, they fall short in others, which means investors must constantly search for new "market beaters."

As you can see from the numbers mentioned above, most funds this year have lagged, so many experts favor index funds, including:

* Vanguard Index 500 (800-662-7447; minimum investment, $3,000 or $1,000 for an individual retirement account).

* Schwab 1000 (800-435-4000; minimum $1,000 or $500 for an IRA).

* Dreyfus Midcap Index (800-645-6561; minimum $2,500 or $750 for an IRA).

Another approach focuses on the stocks of small and mid-size companies.

They populate that 90 percent of mutual funds underperforming the market and could be ready to play catch-up. By at least one measure, they've already started. The Russell 2000 index measures such stocks and last week reached a record.

A bull market often ends with a rush from smaller stocks. Some experts think the rush has started and recommend up to 10 percent of your stock portfolio in them.