Because of the past week's market losses, it is an appropriate time to discuss the many concerns that many people have expressed to me over the past several months. Let's face it, no one likes to lose money, although admit it, we all just love to gamble. Everyone would love assurances that their investments will rise 12 percent a year (at least).

If I were Merlin, the magician, I would have all the right answers for you.

You would be wealthy, I would be rich, and I could then just kick back on a magnificent 150-ft yacht, with a permanent crew, of course. But I don't have all the answers, but then neither did George Soros, Julian Robertson, and the boys at Long-Term Capital Management (Nobel Prize Winners Merton and Scholes and the famous John Merriweather, formerly of Solomon Smith Barney).

The difference is that they thought they did, while I never have pretended to have all the answers. And they got paid plenty more, as they say.

What I can give you are some criteria to understand and assess your present investments, so that you can make some rational decisions about them and move on. Unfortunately, only you can make the final decision.

VOLATILITY IS HERE TO STAY What almost brought the US stock market to a halt in 1987 (a 587 point drop in one day), is far more apt to happen now even on a more frequent basis.

Usually, after such a precipitous drop, the market corrects itself, and some rather nice gains may result.

Approximately 70 percent of US citizens have invested in the market; the Europeans have recently been exposed to investing through changes in their pension plans (so have Bermudians); the Chinese are opening their markets to foreign investment firms; and online momentum trading activity continues to increase. With the sheer magnitude of trillions of dollars being put into play, the peaks and valleys will continue to be exaggerated.

LEARN TO LIVE WITH RISK OR GET OUT You will have to learn to live with this minute by minute rise and fall in the value of your investments, or step back right here and now. Ask yourself are you totally risk-averse, that is, do you have any tolerance at all for seeing negative numbers, even for five minutes? Generally, if you hold investments long-term the level of risk drops significantly to near undetectable levels. However, if you cannot tolerate the wait, you may have to make the decision that investing in stock markets is just not for you. Do you really need to generate ulcers? Your investor profile is better off setting up a really good budgeting plan; sticking to it, and watching your fixed deposits grow. We are talking about qualify of life here, readers; the rule is not how much money you want, but how much do you need to be comfortable. Malcolm Forbes, who was worth billions, always said, he who dies with the most toys wins, and he died anyway (in his early seventies).

Would someone explain to me what he won? And who got his toys? SHOULD I CUT MY LOSSES AND SELL NOW? Readers ask these questions all the time; they become particularly concerned when market investing looks so bleak. It depends upon your circumstances; what do you own, why did you buy it and when will you need the money? If you needed this investment in three years, say for private school, you should not have put that restricted cash into the stock market. Why, because you are making short term bets that you will meet your goal.

If the market is tough for three and one half years, and then rises astronomically in the fourth year giving you the best four-year gain ever, you will have missed the whole thing because you would have cashed out. You cannot time the market, many have tried, many have failed.

Review your portfolio. Let's talk about stocks first. What kinds of stocks did you buy? Do they represent good heavily capitalised companies that have trundled along at a steady pace for years? Take one of these stocks and go to its home page, say GE or American Home Products. Most of these Websites will show stock value historically for years.

The site will also show analysts recommendations (buy, hold, sell) generally for fairly long time frame.

Has your stock gone up and down but always recovered? Do analysts generally recommend to hold or a cautious buy? Yes, well, then what is your time horizon? Do you need the proceeds from this stock in the next few years? No, well then why sell? If interest rates are pushed down again by the Federal Reserve (and you have sold), you may miss the recovery of this stock and subsequent gain for the year. Yes, I know how hard it is to look at everything in negative figures, but if you don't need to cash it in, don't, even if you want to whine to everyone in sight about your losses. If you don't cash it in, these are paper losses .

Well, you say you bought mostly tech stocks, you should apply the same research methods if you can; however, unfortunately, many tech companies are too young and have very little history for comparisons. Instead, you might try accessing deathwatch.com.

This is a financial Website that assesses the vulnerability of tech stocks.

They do this by calculating from publicly filed financial statements, just exactly how much `free cash' a tech company has to remain fully operational.

With some of these companies, now, it is a matter of weeks left. Amazon.com a couple of months ago was predicted to stop functioning around May 2001, if no additional capital could be raised to continue to operate. If you get negative comments here, you need to search further, talk to your advisor and....well, perhaps your tech stock may not recover. Then you may have to determine to cut your losses while you can.

WHAT KIND OF INVESTMENT POLICY HAVE YOU SET FOR YOURSELF? How many stocks do you own in our portfolio? I generally recommend that you must have at least 30 (at a bare minimum) to be fully diversified and you had better be very good at what you select with this low number.

Prevailing investment theory states now you need at least 60 for minimisation of some risk. Why would you place your bets on two, three, or four? You are better off starting out by purchasing mutual funds. Please don't whine about the cost to purchase them. You are paying for the right to hold and be fully diversified in anywhere from 60 to 300 companies. Yes, they have taken hits, too, but last year mutual funds on average lost less than individual stocks and many of them made money, utility funds, for instance. And in spite of media hype, not every investor lost money last year.

Think about what you are doing! For goodness sake, I have clients say to me, `well, I just thought I would try it out'. What, with your hard-earned money? Would you do that with a car? Close your eyes and pick one, without researching everything you can to find out if the car is reliable, priced correctly, suitable for your needs and having the ability to hold up long-term as well as sturdy enough to protect you in case of an accident.

Besides the purchase of a home, investing may be the largest amount of your money you place anywhere. Be careful with it. A few weeks ago, I wrote two articles on questions to ask your advisor about their investment credentials and about the products your are getting. Use it as a reference guide.

IF YOU OWN MUTUAL FUNDS Apply the same methods as above. Websites you can use to research for US mutual funds are morningstar.com, yahoofinance, and msnmoneycentral. For the offshore world of 38,000 mutual funds, there is a bewildering array of choices and sites, two that will provide some material are micropal.com and lipper.com. Use the same criteria, with a couple of additional items. First, check out how well the fund performed in prior bad cycles, 1987, 1991, 1994 and last year. If it held up better than average, this is a comfy feeling.

Then you want to know just exactly how well this fund is performing based upon comparisons with other funds in the same peer group. Clients are always dismayed when we pull these sheets out and your fund has been at the bottom of the list for years. Ask you advisor why, readers, with so many choices, you have one of those? Invested in tech funds, or new funds, you need to go to your advisor and get some answers. A good one will walk you through all of these issues.

And finally, one other very important issue with mutual funds check the size of the fund against the size of all of the other funds in the same peer group.

If it is a big, heavily capitalised well managed mutual fund, bear markets and net cash outflows caused by panicky investors pulling out, will not affect it.

If your mutual fund is small, watch out, net cash outflows hurt small funds, sometimes badly. They become extremely expensive to operate because economies of scale are reduced and these costs are passed on to the remaining investors.

This pushes the rate of return further into the red. Ask your advisor what the net cash outflow has been in the last few months. Offshore, this information is harder to find, in the US, websites ferret this information out. Again, with 38,000 funds to choose from, if your present fund is `sitting in the cellar' and always has, you need to ask your advisor some hard questions about why you were put into the fund in the first place. Questions such as, `did you receive additional trailers or commissions on such a fund?' NO ONE REVEALS THEIR TRUE LOSSES Stop taking the advice of family and friend and hot tips from co-workers.

While it works sometimes, you are running with the herd and using crowd mentality; at the first sign of trouble, they all head for the exits. Decide what you want in the way of a real return on your investments, and then read and read and read some more. Everyone was an investment expert in the last few years, many of them are underwater today (many Bermudians as well), including some rather prominent money managers of the year 1999. If your time horizon is long, you can afford to invest cautiously and carefully. Don't forget, every single one of you is invested in your pension fund - for the long haul.

ARE YOU STILL GETTING GETTING SERVICE FROM YOUR FINANCIAL ADVISOR And while we are on the subject of opportunity, what kind of service are you getting from your financial advisor these days? They have made their money, but a really good conscientious investment advisor sticks with you through thick and thin. In fact, if you have a substantial portfolio with someone you should have gotten a phone call this week. An experienced and committed investment professional can help allay fear and keep you on track. We know, we have seen this before and we will again, in a different form and at a different time.

YOU HAVE TO TAKE RESPONSIBILITY FOR YOUR ACTIONS Did you tell your advisor you don't understand the markets very well, or did you tell your advisor that you are an aggressive investor and want to ride the glory train all the way up? Do not blame him or her if you were invested per your instructions. If you didn't understand and did not ask for further information, you should have. Having said that, under the Bermuda Business Investment Act, your advisor has a fiduciary duty to recommend investments that are suitable for you and your risk tolerance. This law protects you, use it.

BUT WHAT ABOUT ALL THOSE GREAT BUYING OPPORTUNITIES OUT THERE What about them? They were there before and will be again, there is always a great buying opportunity. From my perspective, it does no good to talk about the great buying opportunities (so many good stocks are undervalued), when you are looking at having lost 20 percent or more of your current investments.

In your present mind frame contemplating that move requires courage, great faith, or sheer lunacy, depending upon your aversion to additional risk. The first thing you have to do is figure out what you are comfortable with, and then decide what your personal investment policy is going to be. Once you have laid out an investment plan to follow, temporary dips in the market will be viewed as just that. Over the past 80 years the market has dropped and risen, always to a higher level. If history is to be believed, it will again.

Martha Harris Myron CPA CFP, is a Bermudian, a Certified Financial Planner, holds NASD S.7, has a US tax background and is programme director for the Financial Planning Association of Bermuda. Questions regarding this article may be sent to Email: marthamyron ynorthrock.bm Under no circumstances does the information in this column represent a recommendation to buy or sell stocks or any other investments. Readers needing specific assistance should seek advice from an experienced professional financial advisor.

Anxious moment: Dealers on the US stock exchange had another tough week, with the Dow suffering some major losses yet again.