`Converts' are made to order for times like these

The Ticker

May 09, 2001|By JULIUS WESTHEIMER

"DO YOU THINK the bear market is over, just getting started, or aren't you sure?" asks Richard Lehmann, president, Income Securities Adviser Inc., in Forbes, May 14. "No matter how you answer this question, you should consider adding some convertible securities to your portfolio."`Converts,' as they are called, are made for markets like this. The advantage of convertibles is that they pay a substantial fixed rate of return while participating in some of the upside potential of the underlying stock. If the stock goes down, so does the `convert,' but not as far.

"So if you're bullish long-term but worried short-term, you can participate in a resurgent market and collect a healthy yield while waiting."

Black Enterprise, May, lists this "Declaration of Financial Independence": "Save and invest 10-15 percent of your after-tax income. ... Be a proactive and informed investor. ... Engage in sound budget, credit and tax management practices. ... Teach business and financial principles to your children. ... Maximize earning power through a commitment to professional excellence."

WALL STREET WATCH: "The tech sector is still likely to deliver bigger returns than the broad market over the next five, 10 or 25 years." (Ian Shepherdson, chief economist, High Frequency Economics)

"There's still too much optimism for the market to be anywhere near a bottom." (Kenneth Fisher, portfolio strategist)"`Internet mania' hurt lots of old-line stocks, and many people say the party's over. I disagree. There are many bargains out there. The party has just begun." (John Rogers Jr., CEO, Ariel Capital Capital Management Inc.)

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