Will buying an index fund protect you from a stock market decline? "With index investing, you could still suffer `motion sickness' of a turbulent market," says Michael Stolper, investment adviser. "Index investing only captures the trend of a portion of the market, but index funds will fall just as quickly as other funds if the market drops."
WALL STREET WATCH: "Steer clear of overpriced New Economy stocks. Recently, the price-earnings ratio for Nasdaq companies has been extravagantly overpriced - in the 150-200 range. A range of 12 to 20 is reasonable." (Ralph Wagner, mutual fund manager)
"Look overseas for the next Internet boom," says Bill Brennan, financial planner. "Other industrialized companies - notably Japan - are years behind the U.S. in making the Internet part of everyday life. Opportunity: Consider a U.S.-based mutual fund with significant overseas technology holdings."
