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Lipper
Muriel Siebert & Co.


Bear Claws



Knowing that the bear market has its claws well-entrenched in the markets is one thing, living with it for the novice investor is another.

Everywhere you look---from stock fund investing to retirement accounts---there seems to be bad news about investing. According to Lipper, the second quarter equity numbers showed that for the first time since December 1975 the average stock fund was down for the trailing three-year period. Look at the retirement account arena and the news isn't much sweeter. The Investment Company Institute, the trade associaton for the mutual fund industry, reported that in 2001, monies in all types of retirement accounts fell four percent. That's the second year in a row in which assets dwindled. Figures for this year won't be available until 2003.

But even though today's investment news is lousy, be careful not to get totally caught up in it or swept away by it. Afterall, in adversity there is always opporunity. How you view current market conditons, however, may have more to do with your personality than your pocketbook.

"Reactive people let things happen to them. They tend to see change as a loss or threat, " says Sharon Danes, a professor at the University of Minnesta in the Safeco Update Spring 2002 Newsletter. "Proactive people expect "stuff" to happen. They are more flexible."

With that in mind, there are many lessons that the today's market conditions can teach new investors. Here are15 points to ponder:

1. Investment bubbles do exist and when they burst they make a mess.

2. Don't spend paper profits before you've realized them.

3. Markets are constantly changing.

4. The best laid long-term financial plans aren't carved in granite.

5. Investing has never been risk free

6. Stock prices can do three things--rise, fall, or remain flat.

7. Nest eggs, like our lives, are fragile.

8. Diversification among asset classes makes sense.

9. Diversify who manages your money among funds, fund families and brokerage or investment advisory firms.

10. There are no time limits imposed on bear --- or bull---markets.

11. There are always investment opportunities in the markets no matter what the Dow Jones Industrial Average, S & P 500, or NASDAQ reads.

12. No matter what's going on in the market today, tomorrow is another day and will be here before you know it.

13. Living costs lots of money. Build a sound financial savings or available assets base first--- then from it begin an investing program.

14. There are other ways to secure a sound financial future than from the stock market.

15. Investing in it isn't for everyone.(not all investments make money, either--timing is everything)


Love to cruise? Well, here's your chance to cruise the Caribbean aboard the Sea Princess and pick-up some investment knowledge along the way on the third annual Morningstar Investment Cruise.

Guests for next year's event include Don Phillips, managing director of Morningstar, Vanguard's founder and former chairman John Bogel, estate planning specialist Jeff Verdon, and a number of other Morningstar experts like Christine Benz, Brian Portnoy, Travis Pascavis and Pat Dorsey.

Some of this trip's investing topics are: The 10 Commandments of Stock Investing; The Seven Sins of Fund Investing; How to Get the Most out of Morningstar's New Star Ratings; Building Portfolios in a Tumultuous Marketplace; and Knowing When to Sell.

Dates for next year's Sea Princess cruise are Feb. 8-15, 2003. Ports the ship will visit are Barbados, St. Lucia, St. Maarten, Tortola and St. Thomas. Morningstar's discounted cabin rates for the 7-day cruse range from $1,786 to $2,736 and include all food and amenities as well as port taxes and government fees.( These rates are about $1500 less than normal but are only available only to those participating in the Morningstar program.)

On top of the cost of the cruise is the Morningstar seminar fee of $495. It covers the cost of all the investing sessions, Morningstar receptions and CE credits for financial advisors.

To learn more call 877-433-8833.

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Dian Vujovich is a nationally syndicated mutual fund columnist, author of a number of books including Straight Talk About Mutual Funds (McGraw-Hill), and publisher of this web site.


To read more articles, please visit the column archive.




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