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To: Jeffrey D who wrote (8761)	11/23/1998 1:38:00 AM
From: Jeffrey D	Respond to of 42834

Article on the difficulty in market-timing. Well....difficult for those "Bad News Bears"! Jeff << Buy-and-Hold Still the Stock Option -------------------------------------------------------------------------------- NEW YORK (AP) -- These are tough times for market-timers. This year's wild fluctuations in the financial markets have provided strong new support for the widely accepted idea that it's difficult, if not impossible, to do well jumping in and out of stocks or bonds. You can't outsmart the market, say the vast majority of financial advisers -- and there's really no point in trying. Even if you're pretty good, or pretty lucky, at the game, the trading-cost and tax dragons will eat you alive. Fortunately, the buy-and-hold school adds, you have an excellent shot at reaching your goals without timing. A patient, long-term investment approach certainly has worked just fine through the great bull markets of the 1980s and '90s. ''The phenomenon of market-timing has disappeared,'' declares Avi Nachmany, director of research at the mutual fund consulting firm Strategic Insight. ''Very few investors now respond to short-term price declines by liquidating their fund holdings.'' At a conference last week sponsored by the Investment Company Institute, Nachmany traced a prolonged downward trend in the amount of money exchanged out of mutual funds each month, as a percentage of the total assets invested in the funds. Lately, he said, it has dwindled to around one-half of one percent, from 4 percent to 8 percent in the mid-1980s and 2 percent to 4 percent at the start of the 1990s. ''Last summer was quite a frightening summer,'' he said. ''Yet out of every 200 equity dollars in mutual funds, 199 have not responded defensively.'' This trend means many good things for the markets, Nachmany and many other observers agree. For one thing, it raises the prospect that individual investors can serve as a stabilizing influence on the markets, rather than being a potential source of extra volatility. It also suggests that most people won't take their money and run at the next sign of a bear market, leaving themselves hapless on the sidelines when subsequent bull market gains occur. But as happy as they may be to see all these positives, some analysts have one misgiving about the new attitude. Confidence in a buy-and-hold strategy is well-placed, they say, as long as it doesn't become a complacent assumption that markets always prosper if you're just willing to wait a few months. For evidence that long-term prosperity isn't always a sure thing, one need look no further than the Japanese stock market, which struggles along these days at between one-third and one-half of the high it reached almost a decade ago. When Robert Shiller, an economics professor at Yale University, sent a questionnaire to 400 wealthy investors in 1996, more than 80 percent described attempting to time the stock market as ''not a smart thing to try to do.'' But in that same questionnaire, Shiller told the ICI conference, more than 80 percent agreed either strongly or somewhat with the statement, ''if there is another crash, the market will surely be back up to its former levels in a couple of years or so.'' This is a bit troubling, Shiller says. ''If the market is unforecastable,'' he notes, ''then it should be unforecastable after a crash too.'' What does all this mean to a typical investor? One conclusion is that, no matter how optimistic you are about the future of the stock market, you can never be certain about it. So while investors looking for growth may sensibly want to put a good portion of their assets in stocks or stock funds, staying diversified in other, less variable investments such as money-market securities provides a necessary cushion in case good times don't prevail. >>

To: Jeffrey D who wrote (8761)	11/23/1998 11:22:00 AM
From: Tony Viola	Read Replies (1) \| Respond to of 42834

Jeffrey, >>>Japan always seems to find a way to spoil the party. Jeff << Japan recession hits blue chips, more gloom ahead<<< How quickly we forget. In the 1980's, we were afraid they would eat our lunch, and dinner. They were gaining by leaps and bounds in technology, even causing Intel to remake their company (DRAM and microprocessors to primarily MICROPROCESSORS). The Japanese were also buying American institutions like Rockefeller Center and Pebble Beach. Now, some worry about their economy taking down the rest of the world. You never know. Regards, Tony