Where do we go from here?

Corporate perjury has finally come around to plague the once mighty Dow and Nasdaq indices. Investors have been lied to and taken advantage of. The pillars of full, honest and true disclosure have been eroded by greed, desperation and uncertainty.

We are now left with the sentiment of ãwho to trustä ãwhoâs nextä and ãwhat should we doä?

So where do we go from here?

How can we simply exercise retention, let alone profit?

Well, the answers are simple. Investing has regressed back to the basics and its core fundamentals ÷ Discipline and rationality and not emotion and unrealistic optimism.

A systematic and focused approach of quarterly reviews, proper asset allocation (bonds, equities and cash) and stop losses should be strictly followed.

Individuals should consider the downside first rather than the upside when evaluating companies and funds to invest in.

Here are some fundamentals that will assist you in safeguarding your portfolio.

Step one ÷ know where you want to go: Be clear about what you want your investment portfolio to accomplish, over what time interval and what risk level you can tolerate.

Step two ÷ make a plan for getting there: Choose the appropriate mix between stock, bonds and cash to manage risk, deliver adequate level of current income and provide desired future growth. How large a role should stocks vs. bonds play in your portfolio? What types of stocks are best suited for you in todayâs investment environment?

Step three ÷ Implement the plan: Build the equity portion of your portfolio by consulting a professional. Evaluate the risk profile of the companies that you choose. Remember to be realistic ÷ and cautious ÷ in todayâs markets.

Step four ÷ Manage your process: Regularly evaluate how your portfolio is doing. Periodically review steps one and two to make sure your portfolio is headed in the right direction.

Implement a selling discipline with stop loss orders and regular quarterly culling of profits returning stock weightings back to original amounts.

For a non-obligatory portfolio review and/or

general recommendations on the markets, contact LOM Securities (Bermuda) Ltd. investor Paul Jenkins at 292-5000.[[In-content Ad]]