Bear market may not be all bad news.

• Position: Investment

There is one very important thing for the long, term Investor to do in a stock market that is beset by corporate scandal, accounting doubts, and CEO chicanery--"nothing"--according to Michael Cooper, professor of finance, Purdue University, West Lafayette, Ind. Coopers "nothing" cornea with an important proviso--that the investor is already following his basic rules for prudent investing in any market:

* Develop at least some understanding of the risk-reward trade-offs among stocks, fixed-income investments (bonds, CDs, and money markets), and real estate. Stocks tend to have a higher reward over time than other assets, but have greater risk (more up-and-down movement in the value of your investments). Many online broker ages sites have free investor profile questionnaires that help you determine just how much of your portfolio should be in stocks, bonds, and other assets.

* Understanding that it is difficult to profit from prophets (stock analyst recommendations). Most studies show that it is very hard to beat the general stock market by investing in individual stocks that "experts" recommend. This is especially true when trading costs em included. In addition, most studies show that "actively" managed mutual funds, or those that try to pick which sectors or groups of stocks will outperform the market, also do not beat the market. This information has important implications.

For most investors, do not invest in individual stocks, and do not attempt to trade individual stocks frequently in hopes of large, quick gains. A recent study from the University of California at Berkeley which examined the records of 35,000 individual investor accounts at a large brokerage house found that the portfolios of single men underperformed those of single women by two to three percent per year. Why? Men tend to be overconfident and trade more. "Trading is hazardous to your wealth," Cooper warns. "Out of 60,000 households, those that trade the most underperforrned the market by seven percent per year." There's no safety in consensus, either. "The average investment club...