Income Fund

Q. My stock in the Limited has had its ups and downs. Is this the right time to buy more?A. The potential is unlimited.Buy more stock of the Limited Inc. (around $22 a share, New York Stock Exchange) because it's undervalued when one considers the long-term prospects of its diversified fashion divisions and the excellence of its management, advised Steve Kernkraut, analyst with Bear Stearns.The addition of upscale store Henri Bendel to the Limited's mass retailing and lower-price apparel businesses is a definite plus, he believes.

Q. My friends and I have been comparing yields on our utilities funds and mine seems to come up a bit short. Can you help out a senior citizen and give me some advice regarding Fidelity Utilities Income Fund?A. What a difference a year makes. Shareholders who benefited from that fund's aggressive strategy in 1991 haven't done as well this year.Fidelity Utilities Income Fund had a total return of 21 percent in 1991. Investors, shocked by declining interest rates, flocked to the high yields of utility stocks and share prices rose accordingly.

Ask a broker where you can get yields exceeding those of money market funds or certificates of deposit without exposing you to high credit or interest rate risk, and there's a chance that he'd recommend a short-term world (or multimarket) income fund.To take advantage of the higher yields available abroad, most of those funds invest in foreign money-market instruments and investment-grade issues maturing in three years or less. They also might invest in short-term U.S. debt securities.But would one of these funds be suitable for you?

Of the many statistics that flow continuously out of Standard & Poor's computers, Brian C. Rogers awaits none more eagerly than the monthly report on how many companies' boards of directors voted to raise, cut or omit the dividends paid owners of their common stocks.The figures tell Mr. Rogers at least two things:* How directors view the prospects for their companies and, in the aggregate, for the economy. A board, for example, is less likely to declare a higher dividend if members lack confidence that revenues and profits will rise enough to let them maintain it in the future.

While some investors are bidding up their favorite growth companies to all-time highs, others are looking for growth at the right price.Jeff Vinik, who runs the $3.8 billion Fidelity Growth & Income Fund, is one such investor."

It's retirement account time.More Americans think about their Individual Retirement Accounts and Keogh plans for the self-employed at tax time than any other time of the year. Whether they contribute new money or not, they ponder whether to shift around their retirement holdings. In many cases, the dollars are substantial.Whatever Congress eventually decides about the future features of IRAs, be sure to diversify retirement holdings and take into account all recent trends in interest rates and financial markets.

Yields of money-market funds and CDs are slipping in the United States, but double-digit yields are still being offered on short-term securities in some foreign countries. So, you may be considering a mutual fund invested in such foreign issues.If so, it's probably a short-term world income fund. It is likely to pay more than a money-market fund and to be less volatile than a long-term bond fund.According to Lipper Analytical Services, 43 short-term world income funds were in operation at the end of 1991 -- up from about a half-dozen at the end of 1989.

When you invest in a bond mutual fund, you expect to earn income. How much you earn depends largely on the degree of risk that the fund carries: The longer the maturity and the lower the credit quality of the bonds in the fund's portfolio, the higher your income.You generally can't rely on a bond fund for capital appreciation unless we're in a period, such as the current one, in which interest rates fall and bond prices rise. But the beginnings of those periods are unpredictable, and their endings always come too soon.

In a way, you and Jeffrey Molitor probably have a lot in common.When you look for an equity fund, you probably screen a number of investment advisers and their funds' portfolio managers.Molitor screens advisers and portfolio managers, too. But he does it as part of his job. And he oversees hundreds of millions of dollars -- a bit more than you normally would mail to a fund.As director of portfolio review for the Vanguard Group, Molitor periodically recommends new investment advisers to directors of equity funds that Vanguard sponsors but that he prefers to have managed externally.

Whenever the stock market has had a tremendous rise, as it has in recent months, you hear a lot of talk about taking profits and selling overvalued stocks (if not about paying income taxes on those capital gains or brokers' commissions on the trades).You also hear suggestions to keep the sales proceeds in money-market funds until a correction hammers down share prices so the same stocks or others can be bought at lower levels.While this may work for those who claim the ability to call market turns successfully, it doesn't work for most investors, who don't have -- and shouldn't expect to have -- the knack and who find unsuccessful market timing costly.