On Wednesday, the long-waited event for capital market analysts and investors alike, happened firmly and dramatically. Defeating the doomsdayers (and the baby bears) once again, the United States stock market blasted upward, with the Dow crashing through the 10,000 mark; the NASDAQ, fared even better, with the fittest technology stocks leading the way.

When Larry Ellison, the respected CEO of Oracle stated that his company was looking forward to more than respectable growth next year, it as the sign awaited from a higher power. One can analyse stocks, companies and markets on a consistent basis, but nothing can compare to reliable, trusted data from an industry veteran, known for impeccable disclosure of the relevant economic facts, both good and bad.

When contrasting Oracle's open style with the 'smoke and mirror' financial reporting of Enron (the global energy company brought down by massive off-balance sheet risk, a subject for another day), it is easy to understand why investor confidence slid to zero. Was it Shakespeare who stated that 'reputation is all'? Nothing beats an impeccable reputation.

Funds flow trackers have estimated that in recent weeks, in excess of $1 trillion was sitting in cash on the sidelines, waiting for better economic news. Much of that was reinvested on December 5, 2001, with the NASDAQ seeing very heavy volume of 2.8 billion shares trading hands. Will this be the incentive needed for the average American consumer to loosen up the purse strings?

Note: This column was written from Florida where we have taken our beloved grandchild to Walt Disney World. People everywhere here, wearing the American Flag, everyone. 26 of the 30 Dow stocks had gains. Advances in value lead declines in value by more than two to one. With WTC9-11 less than 90 days in the past, the resilience of the surviving companies, their employees, the United States economy, has been clearly demonstrated. Does this mean that the Dow or the NASDAQ will stay up, way up? No one can predict the future in certain terms, but the capital market activity does make a statement about chances of recovery on a historical basis. In conclusion, one more terrible, terrible incident in our world does not necessarily stop economic growth. After the discussion last week on investor recovery of confidence, this is the biggest example yet for not making emotional investment decisions in times of crisis. Interestingly, even the spurned growth stock funds have had renewed interest lately; it is one of those that will be selected to build our new model portfolio.

This model portfolio, which will be composed of various mutual funds, individual stocks and bonds, money funds, exchange traded shares, and hedge funds. It will take approximately six months to build the entire model. So, in keeping with the current format (you never know what you are going to get), and in order to keep your boredom quotient from rising too drastically, the portfolio model building will be interspersed at intervals with other topical financial articles.

Before we start there are two things that need to be pointed out. First. It is not easy to become a do-it-yourself investor today, particularly in the mutual fund world, which lists a staggering 38,000 or so complex investment vehicles. You will have to become accustomed to comparing numbers, reports, and information on various websites, prospectuses, and other information, some of which may not be as current as it should be. It is a steep learning curve for many. You will need to be persistent. Keep in mind that educating yourself financially and investing for your future is the goal your are striving for.

In order to make good comparisons between investments, we will use a grid of approximately 15 categories Financial advisors of one form or another are largely responsible for more than 70 percent of the sales in US today. Increasingly, fund companies have seen the light regarding their bottom line revenue statistics, and are dropping no-load mutual fund products from their inventory. Invesco (United States) announced last week that effective April 2002, they will sell only load or commission based products. Invesco is following in the footsteps of Warburg Pincus, Scudder, TRowe Price and many others, who earlier have adapted the same strategies.

This is a complete about face for the mutual fund industry, which until the advent of this two-year bear market, promoted direct investing to the more than 50 percent of do-it-yourself investors. No more; most of the investors that survived to tell a tale another day have sought help from a financial advisor. Invesco (US) projects that by 2004, less than ten percent of its mutual funds will be sold no-load or direct to the investor. These remaining sale percentages will most probably be divided between Fidelity, Janus, and Vanguard. Fidelity already has an Advisor division, were products are sold exclusively through brokers and financial advisors. With Janus' image somewhat tarnished in the press for their purported style drift during the technology craze (and terrible losses), Vanguard (with its incredibly low expense ratios, innovative founder, and technically astute website, appears poised to dominate this market.

Living offshore, we have some wonderful, wonderful choices. We can choose to work (if we educate ourselves) with some of the most advanced financial companies in the world. We have the largest group of mutual choices, which can be purchased from almost any jurisdiction in the world (depending upon whether your brokerage firm will deal as a third-party intermediary). Your chances of buying direct may be even more limited than using a US website, so while you are doing your investigating your investments start looking for a good financial advisor. Buying direct from US website can be done, but there will be additional compliance reporting requirements and tax ramifications to this decision. To be complete objective, we will include both direct sales and working with financial advisor processes in the investment research.

Because of the size of the Bermudian market and the small number of investments firms, it was felt not prudent to recommend specific brand name products. However, the real brand will be tracked, and given a pseudonym name. We'll do our best to give you as many research resources as is possible. Next lesson, look for the first fund, a large-cap stock growth fund. A stock growth fund? You say, why their record has been awful over the last two years! Investing very often means not following herd like lemmings. Large-cap growth funds over the last 15 years have turned in a very, very respectable performance; this could be the best time to invest in them. Will it? We will provide the help to research this group, and you will decide.

Martha Harris Myron CPA CFP is a Certified Financial Planner (US) practitioner. She holds a NASD Series 7 license, was a US tax practitioner for 12 years, and is the 2001-The Bermudian Best of Bermuda Gold Award winner for investment advice. Confidential Email can be directed to marthamyronnorthrock.bm The article expresses the opinion of the author alone. Under no circumstances is this advice to be taken as recommendations to buy or sell investment products or financial plans. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.