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Stock investment tips

- Alan Lavine and Gail Liberman

As the economy gets stronger, many expect large companies with strong earnings growth to perform best.

After all, small companies already have registered double-digit gains over the past three years.

But the stock market is fickle. So it's often best to hedge your bests by owning stocks, bonds and inflation hedges, like gold, real estate and inflation-indexed U.S. Treasury bonds.

How much in each? Here are some benchmarks:

  • Keep 5 to 10 percent of your assets in inflation hedges, such as gold or real estate.

  • Younger persons who can risk losing a lot over the short term in exchange for potentially large long-term gains may put 70 to 80 percent in stocks. The rest: In bonds and cash.

  • Can't afford to lose? Or, looking for periodic income? Consider 30 percent in stocks. The rest: In bonds and other low-risk investments.
Every person is different. So it could pay to get a financial check-up from an experienced advisor. Stick with someone who has at least 10 years of experience.To learn how the adviser gets paid, check out his or her background at www.sec.gov.


Spouses Gail Liberman and Alan Lavine are syndicated columnists. You can purchase Alan Lavine & Gail Liberman's latest book Quick Steps to Financial Stability (QUE Publishing 2006) online at www.moneycouple.com or at your local bookstore. E-mail them at MWliblav@aol.com.

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