Personal Finance: Q & A

A Good Dividend Is Hard To Find

Q I have 1,214 shares of Niagara Mohawk. It has not paid dividends in about three years. Can I switch to mutual funds where I might collect dividends? Do I have to sell the stock to reinvest?

- M.N., Fredonia, N.Y.

A "If you want dividends, sell the shares and reinvest the proceeds," suggests James Fraser of Fraser Management Associates, Burlington, Vt. He suggests you look for a good dividend-paying mutual fund.

"Unfortunately, fewer companies are now paying dividends," Mr. Fraser notes. Or they aren't raising dividends as fast as their stock prices have risen.

A good place to look for mutual funds that pay decent dividends is the Value Line Mutual Fund Survey, available in libraries.

In its "income" stock-fund category, for example, the guide notes that Vanguard Preferred Stock Fund (800-662-7447) yields about 6.5 percent currently, with total return of about 10 percent a year for five years.

Or you can look up other high-payout categories, including real estate, utilities, and convertible bonds (which, like preferred stocks, pay high dividends but see less share-price gain than regular stocks).

If you sell all or part of the Niagara Mohawk shares, you will have to pay capital-gains taxes on the amount the share price has risen since you acquired the shares.

Q Is there a limit to the value of EE bonds a couple can purchase?

- M.P., Wisconsin

A Two co-owners can purchase up to $30,000 worth of savings bonds in any year (maturing at a face value of $60,000). If you go over the limit, it may be overlooked "if it is a small amount, and you made a mistake in good faith," says a spokeswoman for the US Bureau of Public Debt. Otherwise, "we may ask to redeem the extra bonds." For more information, write the Bureau of Public Debt, Savings Bond Operations, P.O. Box 1328, Parkersburg, WV 26106 (phone: 304-480-6112).

Q We purchased some US savings bonds, but the bank misspelled a co-owner's name. Are the bonds good?

- S.J., Astoria, N.Y.

A Yes. Have the issuing bank fix the spelling. Don't try to change it yourself, since altered bonds can't be redeemed. If the bank will not do it, contact the Bureau of Public Debt at the number listed above.

Questions about finances? Write:

Guy Halverson

The Christian Science Monitor

500 Fifth Ave., Suite 1845

New York, NY 10110

E-mail: halversong@csps.com