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The construction and mining machinery industries are expected to do well over the next 12 months, from 3rd qtr 1996 to 3rd qtr 1997, as the US economy expands and international markets recover. These stocks have done increasingly well throughout 1996. An investor should be selective because major selloffs may take place at any time.

Conglomerate corporation securities are a traditionally high attraction to many investors and while many have proved to be profitable, care must be taken in selecting the right companies in which to invest. Investors who anticipate purchasing conglomerate stocks at relatively low prices and cashing in when the corporations restructure or spin off sections, must be aware as to the profitability of all of a conglomerates operations before investing.

Current U.S. economic conditions and uncertainty about the country's immediate economic future, coupled with a prevailing belief that another recession is not likely to occur soon, has increased investor interest in conglomerate corporations. Conglomerate corporations as an investment offer an equal number of advantages, such as low prices, and possible perils, such as cost cutting and asset shuffling. Studies of individual companies can provide better investment guidance than reviewing conglomerate corporations as an entity.

There is good earnings growth for conglomerate corporations, mainly due to cost cutting, although sales are less impressive. Much of the restructuring has been in variable, rather than fixed, costs, and investors must be wary of any announcements. Investors must evaluate these stocks carefully, even though conglomerates perform well during economic uncertainty. These stocks are only moderately ranked for timeliness in 1995.