Q. Is the housing market the reason why my shares of Lowe's Companies Inc. are now poor performers? How long will this last? - VC, via the Internet

A. Declines in home sales and new construction are hurting the world's No. 2 home improvement retailer, behind Home Depot Inc.

It remains financially strong with plenty of cash and excellent longer-term growth prospects, but the current industrywide problems cannot be ignored.

The Home Improvement Research Institute predicts sales of home-repair and remodeling products will decline 1.3 percent this year and does not expect the housing market to improve until mid-2008.

Shares of Lowe's (LOW) are down 20 percent this year following last year's six percent decline. It continues to steal market share from Home Depot and Sears in home appliances.

But it had to cut its profit forecast for this year based on the expected ongoing effects of the sub-prime lending situation on its customers.

Some industry experts contend the home improvement market is starting to become saturated. For example, nearly three-fourths of all Lowe's stores are located within 10 miles of a Home Depot outlet.

Yet as large as Lowe's is, it holds just a seven percent share of the US home-improvement market, so there remains potential in expansion and acquisitions.

For now, it is slowing its pace a bit. It operates about 1,400 warehouse stores, and plans to reach 150 to 155 new openings in the US this year.

Its projection of annual new-store openings from 2008 through 2010 is a slightly less ambitious 135 to 145 stores.

It is also test-marketing smaller stores and more stores in large metropolitan areas. Its first Canadian store in the Toronto area opens this year, and it also has plans for stores in Mexico in 2009. But it is unclear how well the Lowe's concept will translate in foreign markets.

Consensus rating on shares of Lowe's at their reduced price is a "buy," according to Thomson Financial, consisting of eight "strong buys," five "buys," seven "holds" and one "underperform."

Baby boomers are a key demographic for Lowe's because they're major consumers of its products and services.

Lowe's clientele includes do-it-yourselfers, those paying others to do the work and commercial business clients.

Earnings are expected to decline two percent in its fiscal year ending in January and rise seven percent the following year. The five-year annualised growth rate is projected to be 15 percent versus the 14 percent forecast for the home improvement store industry.

Q. The results of Janus Contrarian Fund look too good to be true. Is there a catch? - FF, via the Internet

A. Its performance has been outstanding, its vision boldly extending across market capitalisations and global boundaries.

But although it didn't hold many technology stocks, it did not do all that well during the bear market earlier this decade. Some of its more volatile holdings were hammered hard, an indication that an aggressive strategy of seeking value and holding on tightly can have pitfalls.

The $8 billion Janus Contrarian Fund (JSVAX) is up 30 percent over the past 12 months and has a 25 percent three-year annualized return. Both results rank in the top two percent of large growth and value funds.

"It's a good fund for investors who don't mind its go-anywhere approach," said Andrew Gogerty, analyst with Morningstar Inc. in Chicago. "But because portfolio manager David Decker holds battered picks if he likes their long-term potential, there is always the potential that those picks won't turn around."

Janus Contrarian represents a unique holding for investors with the patience to hold it for the long term, Mr. Gogerty said.

Its holdings in troubled Owens-Illinois Inc. paid off handsomely, and it has recently benefited from international holdings. When controversy hits a decent company's shares, Decker often moves quickly to buy while they are temporarily bargain-priced.

In charge since the fund was launched in 2000, Decker went to Janus Capital in 1992 as an analyst and has managed other mutual funds and private accounts.

His flexible strategy benefits from his firm's large research staff; he seeks out all types of companies with strong cash flow, accelerating returns and quality management.

One-fourth of Janus Contrarian's holdings are in financial services, with 20 percent in industrial materials and 15 percent in media.

Top holdings recently were Owens-Illinois, Liberty Global Inc., Coventry Health Care Inc., Ceridian Corp., Tenaga Nasional, St. Joe Co., Reliance Industries Ltd., JC Penney Co., NRG Energy Inc. and Plum Creek Timber Co.

This "no-load" (no sales charge) fund requires a minimum initial investment of $2,500 and has a low annual expense ratio of 0.94 percent.

Q. When I buy a certificate of deposit at a bank, how is it different from buying one from a brokerage firm? How are these CDs different? Are there some worries to consider? - CK, via the Internet

A. A brokered CD is sold by a brokerage firm on the secondary market, but was issued by a bank and typically is insured by the Federal Deposit Insurance Corp. It often pays a higher rate than a CD from your local bank because brokered CDs compete in the national marketplace.

The primary difference between a brokered CD and one obtained directly from your bank comes into play if you need to take your money out prior to the CD's maturity.

With a CD you've obtained from a bank, you simply pay an early withdrawal fee.

Although a brokered CD offers more liquidity, the amount you can obtain prior to its maturity depends on what another investor is willing to pay when you sell on the secondary market, said Greg McBride, senior financial analyst with Bankrate.com in North Palm Beach, Florida.

"That difference translates a risk-free investment into one on which you could potentially lose money," Mr. McBride said.

(Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, P.O. Box 874702, Tempe, Ariz. 85287-4702, or by e-mail at andrewinv(at)aol.com.)

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