08/17/98 TABLE: Some Guidelines for Dealing with a Correction

Some Guidelines for Dealing with a Correction

A correction shouldn't change your basic approach, but could lead you to some new moves.
If you had planned to take money out of stocks...

-- Sell stronger assets--bonds, fixed-income funds, or European stocks--first.
-- If you must sell stocks, first unload your big losers and book a tax loss.
-- Hold stocks in companies you liked before, especially if they are cheaper.

If you had planned to put more money into stocks...

-- Invest more in companies or mutual funds you liked before the sell-off.
-- Focus on areas--such as small-cap stocks--where buyers are scarce.

-- Never mind market swings: You can't predict them all. Try dollar-cost averaging.

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