Under no circumstances does the informaton in this column represent a recommendation to buy or sell stocks or any other investments. Readers needing specific assistance should seek professional advice from their financial advisor. Martha Myron CPA, CA, is a Bermudian who holds a Series 7 NASD licence and is a US federally authorised tax practitioner. She is programming chair for the International Association for Financial Planning/Bermuda.

Questions regarding this article may be sent to her at 234-0290 or email marthamyronnorthrock.bm.

Three days from today, on Tuesday, May 16, the United States Federal Reserve will meet to decide whether they will again raise interest rates.

Right now, it's considered a sure bet that the rate will rise 50 basis points; some analysts feel that it could be as much as 75 basis points. But what are basis points? One basis point is one-hundreth of one percent thus, 50 basis points is one-half of one percent. Investing marketers tend to refer to prices by basis points, rather than using fractions of a percent.

The US economy is still acting very much like a runaway horse. Consumers are still aggressively buying, according to Walmart in their quarterly earnings report, even though many items are starting to reflect inflationary price increases.

ARE WE HEADED INTO A BEAR MARKET? The stock markets are rumbling like a bear, volume of trading has been light and thin for several weeks.

What's thin? Thin stands for thinly traded and indicates that not many shares of a company are trading or changing hands. Thinly traded means not much demand on the sell or the buy side.

Obviously, a bear market acts the opposite of a bull market. Simply stated, it becomes tougher to make a profit trading shares, company growth drops to a much slower pace and investors don't see many large annual returns on investments.

There are many, many other factors that contribute to the slower growth, among them higher interest rates which drive up the cost of doing just about everything.

If only we all had a crystal ball! Certainly the decreased stock market activity is an unsettling thing to see after the first three months of the year 2000, where several market days saw the biggest volumes of investments trading hands ever.

Again, predicting the direction of any stock market is an inexact science at best. It appears that in the stock market lingo "cash is sitting on the sidelines'' and not much new money is being placed into mutual funds either.

Brokers are unsure as to whether there is not much money left to invest, due to some of the massive losses over the last quarter or, that reluctant investors are just waiting to see what will happen with interest rates before they step back in.

In the last couple of slowdowns, small investors surprised the professionals by ramping up once they felt there were enough bargains to purchase. It is also rumoured that Janus money managers are sitting on huge amounts of cash waiting for a more favourable investment environment.

In spite of, or perhaps because of the recent volatility, Janus funds had the highest net inflow of investment funds for the first three months of year 2000. Janus investment activity is heavily scrutinised by analysts and traders.

Because many Janus funds are so huge, every Janus trade has the potential to impact the entire stock market that day.

MANY IPO LOCK-UP PERIODS ARE EXPIRING A large number of IPOs will be coming out of their lock-up period in the next couple of weeks. What effect having large numbers of new stock available for sale will do to the market is also a concern.

The lock-up effect refers to the period that those who purchased initial public offerings have to hold the stock before it can be legally sold.

Typically, IPO stock has to be held for a period of time of a matter of weeks to a year.

Of course, you are betting when you buy stock at an IPO that it will be worth considerably more in that time frame and that you will make a profit when you sell it.

How will an additional interest rate hike affect investors and consumers in Bermuda. We'll discuss this issue more next week.

Martha Myron on mutual funds and her Moneywise mock portfolio appears on Page 10