Investors dazed, angry and wiser, newsletter says

The Ticker

September 21, 2001|By JULIUS WESTHEIMER

"AS THE U.S. stock market continues to struggle, many investors remain dazed and angry," says Financial Planning Perspectives.

"Some had to postpone planned retirements or find themselves without enough money to pay hefty bills. But the bear market taught us tough but valuable lessons:

"Don't jump around, buying the `hot' stocks and getting burned. ... The market taketh as well as giveth; 90 percent of today's investors came into the market after 1990, never knowing any direction but up."

The newsletter also stresses the benefits of diversification, pointing out that last year lower-performing investments became higher-performing, while tech stocks plummeted. And, after several dismal years, real estate investment trusts (REITS) returned 25 percent last year and Treasury bonds 13 percent, while Nasdaq lost 40 percent after gaining 85 percent the year before. The letter further advises: Have a realistic tolerance for risk, don't let your emotions rule your buying and selling, have sensible expectations, and don't stay out of the market.

NOTES & QUOTES: Bottom Line advises, "Get a head start on year-end tax planning. Estimate capital gains, meet with financial planners to discuss taking losses to offset gains and postpone investing new money in mutual funds until after capital gains distributions."

"In this crisis, nobody knows where the lows will be," says David Dreman, money manager.

"It's perfectly obvious that we're going to have recession for a while." states Alfred Kugel, investment strategist.

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