Company stock can be a drag

The Ticker

July 14, 1999|By Julius Westheimer

IDEAS to improve your financial picture:

"Even if your company's stock is `hot,' you're overweighted if your employer's stock is your largest holding," says American Association of Individual Investors Journal.

"This poor diversification is generally much riskier than the strategy you intended to follow. Further, the older you become (and the shorter your time horizon), the more precarious a portfolio top-heavy in any single stock becomes."

"Stay with your new mutual fund when your old one is merged out of existence. Many fund companies are merging underperforming funds into better-performing ones. The mergers are usually tax free to investors." (Burton Greenwald, investment adviser)

"Even index fund assets need to be diversified," says Harold Evensky, mutual fund consultant. "When the inevitable market correction comes, funds that track the Dow or the S&P will tumble. Diversify with a large-cap, small-cap and an international index fund."

WALL STREET WATCH: "While the Fed's magic wand helped the market power to new highs, other concerns simply will not vanish. Stick to 50 percent equity exposure." (Trader's Focus)

"Don't let high P/E ratios keep you from enjoying the rest of this bull market -- probably until late 2000." (Kenneth Fisher, money manager)

"If interest rates rise further, as I think they will, a strong market will require more earnings under its belt." (Martin Sosnoff, investment adviser)

Pub Date: 7/14/99

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