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Financial services firms are expected to continue their earnings gains, but loan, asset and earnings expansion may slow somewhat as economic shifts shake up investors and financial firms slow their domestic expansion. Mutual fund management services have increases assets under management steadily, but crisis in overseas economies could influence corporate profits.

The financial services industry has benefitted from the economic expansion of the 1990s in the US as an increased number of borrowers and manageable assets have allowed revenues and profits to soar. In addition, commercial banks have purchased many finance companies in order to diversify away from their core operations. These stocks are timely in 1998, but investors need to focus on the least volatile for the next 12 months.

Rising delinquencies and fears that gain-on-sale accounting models may not be viable have shaken the financial services industry a number of times in the 1990s. However, the moderate expansion of the economy during the same time period and macro-economic trends have had positive influences on the industry. These stocks have performed well in the bull market of the 1990s, but investors must evaluate them individually before making commitments.

The financial services industry has been impacted positively by the income growth, interest rate, and other macroeconomic trends of the 1990s, which has had few of the negative impacts of past expansions. The industry has also built a technologically advanced infrastructure, which will enhance competitiveness, and asset management services have grown, as well. These stocks are timely, and many are suitable for conservative investors.

The financial services industry has seen positive macro-economic trends during the 1990s, with few excesses that usually accompany economic upswings. A favorable interest rate environment has also been created by lower interest rates, and competition is increasing for asset management services with the bull stock market and aging baby boomers. There are several good stock selections in this industry for investors to consider.

The financial services industry has proven a timely investment since Sep 1989. Financial services stocks are expected to continue to perform well. The industry is expected to continue to do well during 1997 and throughout the rest of the decade. The moderate economic expansion in the US during the mid-1990s has proven benefit for the profits and stocks of the financial services industry.

Low inflation and favorable interest rates have led to good earnings in the financial services industry for the 3rd qtr of 1996. Personal income gains, in addition to the interest rate environment and low inflation prospects, are also likely to provide for non-bank lending growth and good earnings for both the near- and short-term. These stocks are timely for 1996 and 1997, and have good price potential for the next three to five years.

The financial services industry has had strong profits and increasing stock prices since early 1995. Low inflation, small personal income gains and good interest rates have enabled this industry to grow through providing loans to various market sectors. The short-term and long-term prospects of the financial services industry should continue to be excellent.

Financial services stocks remain timely for 1996 and 1997. Credit card transaction volume, along with the number of cards, continues to rise, but deteriorating credit quality and increasing competition are new concerns. Investment firms are prospering with the bull market, and lending companies are performing well with focused lending. These stocks have only average potential, however, and must evaluated on an individual basis.

Favorable interest rates are benefitting the financial services industry and profits should grow in 1996. Credit card use is growing, with new accounts and transaction volume remaining strong. Chargeoffs have increased, however, with lower credit quality. Cross selling is also increasing in the industry as a marketing tool. Financial services stocks will outperform the market for the next six to 12 months, but then contract in the late 1990s.

There were strong earnings for the financial services industry, especially credit card issuers, in 1995, due mainly to easing interest rates. However, increased competition and other factors will have an effect on results in 1996. Several consumer and commercial lending companies are increasing their market share, and the rising stock market is benefiting asset management firms. These stocks will perform with the market in 1996.

Strong demand for consumer and commercial credit is reflected in financial services companies' revenues and earnings. Nontraditional outlets and marketing incentives are helping credit card transactions grow at 15% per year. Market share competition, however, from banks and others will have an effect on credit quality. Although several of these stocks are volatile, they will outperform the market in 1995 and 1996. Company reports for major financial services companies are included.

Financial services companies continue to enjoy earnings growth despite the interest rate increases of 1994. Competition has caused many credit card issuers to offer lower rates or other incentives. The industry is being segmented by the proliferation of small niche companies offering extremely specialized services. These companies will likely enjoy double-digit earnings growth through the year 2000.

Transamerica is a well managed, solid financial services company, yet its stock is priced below average for similar companies. The low value makes it an attractive acquisition target, especially since about 60% of its earnings result from life insurance. FY 1998 earnings per share estimates are $7.25.