Question: Any information about long-term prospects for our General Motors Corp. stock would be appreciated. — F.R., via the Internet

Answer: "Wouldn't you really rather have a Buick?" was the longtime advertising slogan of that U.S. brand.

These days, many motorists in China these days really would. During my visit to Beijing earlier this year, I was impressed by the number of GM-made Buicks on its crowded streets.

Faster growth in emerging markets, especially Asia and Latin America, is the key to the long-term prospects of the world's largest automaker by sales. More than 1 million GM vehicles were sold in China last year, and its sales there are expected to eventually eclipse those in the U.S.

"The company that gets China right is going to be the dominant player for the next 25 years," GM Chief Executive Rick Wagoner predicted earlier this year.

In the present, however, GM is bleeding red ink and losing North American market share, while European sales are also slipping. It lost $3.25 billion in the first quarter and closed four U.S. pickup truck and sport-utility vehicle factories as it shifted to smaller vehicles consuming less gasoline.

A three-month strike at a major supplier was costly, and May sales were down 28 percent compared with a year ago. Another problem is that GM holds a 49 percent stake in financier GMAC LLC, recently downgraded further into junk status by Moody's Investor Services due to mortgage lending woes.

The automaker's shares (GM) are down 30 percent this year following a 16 percent decline last year. The 64 percent rise of 2006 was driven by SUV sales.

Some positives: GM's all-electric Volt vehicle and a new small car more fuel-efficient than Chevrolet Cobalt will debut in late 2010. Cost savings from the new United Auto Workers' lower wage structure also go into effect in 2010.

The Chevrolet Malibu is a hit, while Cadillac and Buick receive high marks for quality from experts. In a massive reduction, 19,000 hourly GM workers in the U.S. accepted buyout or early-retirement offers with a July 1 exit date.

The consensus rating of GM stock by Wall Street analysts is "hold," representing divergent opinions, according to Thomson Financial. There are three "strong buys," eight "holds," one "underperform" and one "sell."

After an arduous 2008, next year's earnings are expected to rise 75 percent versus the 609 percent forecast for the major car manufacturers. The five-year annualized return of 7.25 percent compares with 14 percent industrywide.

Question: Please tell me whether the Dreyfus Fund is worth owning. — P.R., via the Internet

Answer: This previously lackluster fund took a turn for the better in mid-2005 when talented portfolio manager Sean Fitzgibbon of the Dreyfus affiliate The Boston Company took command.

Seeking reasonably priced stocks with strong fundamentals and growth prospects, Fitzgibbon conducts disciplined quantitative research and modeling to determine the best choices in various industries. Three co-managers assigned to specific sectors assist him. The firm also added some analysts to bring its research team total to 25.

The $1.34 billion Dreyfus Fund (DREVX) is down 9 percent over the past 12 months and has a three-year annualized gain of 7 percent. Both results rank in the top one-third of large growth and value funds.

"At this point, we recommend Dreyfus Fund with the qualification that, even though it has improved, its manager has only been on board a short time," said Lawrence Jones, analyst with Morningstar Inc. "It is a core holding for an individual investor, fitting capably into that role as a stable actively managed fund."

Fitzgibbon also runs Dreyfus Premier Large Company Stock Fund, Dreyfus Disciplined Stock Fund and The Boston Company Large Cap Core Fund. The Dreyfus Fund limits sector and individual stock bets, reducing its risk relative to the Standard & Poor's 500 against which it is compared. However, this also reduces upside potential.

The fly in the ointment of the fund's revitalization has been its stake in financial stocks such as the big banks hurt by the subprime lending fallout. It was able, however, to sell its shares of Freddie Mac before it hit its lows.

"Between the new manager and the increased central research effort, we think this fund has likely turned a corner," said Jones.

Industrial materials, financial services and energy each represent about 15 percent of the portfolio. Top holdings are General Electric Co., XTO Energy Inc., Chevron Corp., JPMorgan Chase & Co., Wal-Mart Stores Inc., Hewlett-Packard Co., Emerson Electric Co., Occidental Petroleum Corp., Cisco Systems Inc. and Bank of America Corp.

This "no-load" (no sales charge) fund requires a $2,500 minimum initial investment and has an annual expense ratio of 0.73 percent.

Question: Does a youngster have to be a certain age in order to buy and sell stocks? Are there any stipulations to be followed? — J.A., via the Internet

Answer: An investor must be the age of majority, which is either 18 or 21 depending on the state, to open a brokerage account in his or her name.

However, a custodial account (such as under the Uniform Transfers to Minors Act) can be opened for the underage child, to be managed by an adult custodian such as a parent. The child can be involved in the investing process, but the custodian makes the final decisions. The custodian can also take money from the account to spend for the benefit of the child.

When the child reaches the age of majority the custodian must turn the assets over to the child.

"These accounts are actually great tools for teaching a child about money by getting them involved in the choices of what to buy, whether stocks, bonds or mutual funds," said Molly Balunek, certified financial planner and vice president with Spero-Smith Investment Advisers Inc. in Cleveland. "In addition, if the minor has any earnings from jobs as informal as baby-sitting or snow shoveling, an individual retirement account can also be set up."


Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, P.O. Box 874702, Tempe, AZ 85287-4702, or by e-mail at andrewinv@aol.com.