Fortune reaffirms value of diversifying portfolio

THE TICKER

September 13, 2000|By JULIUS WESTHEIMER

"Investors are an impatient bunch these days," says Carolyn Geer, financial adviser, in Fortune, Sept. 18. "The high-tech sell-off notwithstanding, many wonder, why diversify when fortunes are being made in a few hot hi-tech issues?

"The answer is that nobody knows what next year's hot stocks will be. If you spread your investments around, you won't make as much money as in the top performers, but you won't suffer the nightmare of having all your eggs in the worst-performing basket."

The article suggests 30 percent in the "total" U.S. stock market, 30 percent in "core" nontech stocks, 30 percent in high-tech and 10 percent in "emerging opportunities."

BOND BEAT: "High-quality corporate bond yields of 8 percent are too tempting to pass up when Treasuries yield 6 percent," says John Bogle, founder of Vanguard Group. "But don't buy a single bond, because that could be risky. Get a diversified portfolio at a higher yield than Treasuries provide."

WALL STREET WATCH: "Although September and October are the year's worst months, now is the time to select high-quality stocks in anticipation of a strong rally. Reasons: End of credit-tightening, high productivity, solid earnings, low inflation." (Richard Geist's Strategic Investing)

"Stocks are getting battered in many segments of the telecommunications industry." (The Turnaround Letter)

"The people who suffer the worst losses are those who overreach. ... Steady, moderate gains will get you where you want to go." (John Train, investment adviser)

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