In a challenging stock market, stay calm, re-examine your portfolio

The Ticker

October 24, 2001|By JULIUS WESTHEIMER

WHAT should we do - and not do-in this puzzling stock market? "The last thing to do in a market fraught with such uncertainty is to lose your cool," says Kiplinger's Personal Finance, November.

"Don't rebuild your whole portfolio based on fear, but recall that the high-tech collapse of the past 18 months taught us the virtue of diversification.

"Now is a good time to re-examine your holdings. Do you have too much money in large-cap stocks? Not enough in small- and medium-caps? A diversified mix positions you for long-term gains in any market.

"After two rotten years in the markets, it's a cinch, barring another cataclysm, that stock prices will be higher 12 months from today."

SAVE ON TAXES: "Get a jump on 2002! To adjust your withholding from wages, file a new Form W-4 with your employer. This is advisable, because most tax rates will be lower in 2002.

"If you don't file a new form, your employer will use the same withholding now in place." (Tax Hotline, November)

WALL STREET WATCH: "We're still in a bear market, and there is time to sell before we go lower. We're a long way from the bottom. There will be spurts, as we have seen, but don't let that fool you. We are a long way from a major buy signal." (Over My Shoulder)

"The last three weeks' action, and recent anthrax reaction, provide opportunities as well as risks. This is why I feel it is poor judgment to be on the `short side' of equities now." (Aeltus Weekly)

"There are billions of dollars in money-market funds of 401(k)s that will go into stock funds. This switch provides even more buying fuel." (Peter Green, in this week's Barron's)

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