Interesting excerpts from investing newsletters:

"Investors should realize that a 7 percent to 8 percent return on stocks is a good return, especially in a modest-inflation, low-interest-rate environment. They should also take a less active approach to managing their portfolios. . . . People should be owners of stocks, not renters."

-- Bob Smith

T. Rowe Price Report

Baltimore

"As far as defense stocks go, no matter how the Iraqi conflict is resolved, our war on terrorism will continue. And one thing is certain: We'll continue to need a very strong military to protect, among other things, our vital interest in Middle East oil. And defense expenditures, which have begun to rise as a percent of GDP, will continue to rise. . . . The two major defense contractors with the most compelling valuations are Northrop Grumman (NOC) and General Dynamics (GD)."

-- Stephen Leeb

Personal Finance

McLean

"The bond rally may be running out of steam, but it is not showing any signs of reversing direction just yet. The shift from Treasury securities to corporate bonds should continue as long as economic recovery is a possibility and investors seek higher yields. Bond ETFs [exchange traded funds] are the latest additions to the ETF lineup. Three Lehman Treasury funds and a Goldman Sachs corporate bond fun were introduced last July . . . [and] four more bond ETFs . . . in November."

-- Ron Rowland

All-Star Fund Trader

Austin

"Fourth quarter 2002 earnings, now more than 80 percent complete for the S&P 500, have shown a 14.7 percent year-over-year gain in as-reported results and a 19 percent gain in operating earnings. However, because actual results have generally been worse than earlier estimates, investors are beginning to mutter 'not again,' fearing that the optimists' phrase 'wait until the second half' will turn into 'wait until next year' for 2003, as it did in 2001 and 2002."

-- Investment Policy Committee Notes

Standard & Poor's

New York