Hold stocks and bonds, diversify and don't `time'

The Ticker

October 31, 2001|By JULIUS WESTHEIMER

WHAT'S to be done with investments now?

Money magazine, November, says, "Although investors are severely shaken by the terrorist attacks, there is no reason to abandon these successful practices:

"Stocks offer the best way to participate in the long-term growth of the economy.

"Don't forget bonds. Quality bonds provide good income and are less volatile than stocks.

"Don't `time' the market. Investors get in trouble when they try to be smarter than everyone else.

"Never overlook diversification. Any stock can turn out to be a huge winner - or a huge loser. Include a broad range of companies - growth, value, small-cap, large-cap, technology and core industries."

BIG JUMP: "Earmark money for your child's tuition bills. Education IRAs are viable investments. The maximum contribution increases from $500 to $2,000 next year." (Black Enterprise)

TOO MUCH? Do you feel you have too much money in one stock? Ask yourself: "If I didn't own one share, would I buy this much?"

HOW MUCH? People ask, "What percent of my assets should be in stocks and stock funds?" One guideline: Subtract your age from 120 and the result is the percentage you should have in stocks. The older you get, the smaller that percentage becomes.

START EARLY: "For your kids, the younger they are, the more aggressive you can be. Put 80-90 percent in stock mutual funds." (Pierre Dunagan, financial adviser)

STOCK WATCH: "We bought a lot of stock at depressed prices. We're nearly fully invested. Several years from now, recent buys will look advantageous." (Blue Chip Investor)

"We doubt that a significant bull market can take place, given that valuations are still quite speculative." (Korty Research)

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