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How To Ride Out The Market's Gyrations

   DON'T PANIC: If you're well-positioned in light of your investment 
objectives, don't try to jump in and out of the market. Historically, over 
10-year periods, stocks have always recovered and outperformed other 
investments.

   DIVERSIFY: There's nothing like a correction to reinforce the importance of 
owning multiple asset classes. It's the best way to reduce risk and enhance 
returns. So make sure your holdings include everything from growth stocks to 
income producers.

   REBALANCE: Find your ideal mix of stocks, bonds, and other assets, then sell 
your winners and add to your losers to get to it. In an equity correction, that 
usually means buying more stock.

   HUNT FOR BARGAINS: Use the slump in prices to pick up stocks in battered 
sectors such as technology. Also worth a second look: Financial services, 
pharmaceuticals, and energy.

   LOOK OVERSEAS: A stable dollar and rapidly growing overseas economies mean 
investors will likely get more bang for their buck outside the U.S. And 
emerging markets, down 20% total during 1994 and 1995, are presently 
outperforming the U.S.

   UPGRADE YOUR PORTFOLIO: Now is the time to buy stocks of higher-quality 
companies with proven earnings records. Avoid ``concept'' companies without 
products or one-idea wonders.

   THINK VALUE, NOT GROWTH: If stock prices continue to drop, value managers 
offer some downside protection, since they focus on lower-priced stocks, many 
of which pay dividends.

   DON'T FORGET TAXES: Before you take your profits and run, keep in mind how 
much you'll net after paying capital gains from the long bull market. What you 
end up owing in taxes may outweigh what you lose in any short-term market 
correction.

DATA: BUSINESS WEEK




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Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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