6 STEPS TO BETTER INVESTMENT.

• Author: HINES, JOE
• Position: Brief Article

Market correction provides learning experience for investors.

If you are one of the investors who dumped a majority of your life savings into technology stocks right before die market correction are not alone. Many Americans, including myself, jumped heavily into technology stocks the and we were all burned when the market corrected. Although it hurts to see the portfolio that you have built up get cut in half, we can turn our misfortunes into a learning experience. A market correction is a perfect time for us to see what we did wrong.

The peak of the NASDAQ occurred on March 13,2000. Since then the NASDAQ has been down as much as 67 percent from that high and is currently down 66 percent* from the high. We did not see this happen because we were blinded by the outstanding returns in. the technology sector in 1998 and 1999. We all heard stories about friends who had invested in the dot-coms and became millionaires. Even investors who could not rationalize the current prices that many of these stocks were trading at decided to buy them because they were tired of watching the companies skyrocket. Some investors who had built up a nice retirement by investing moderately in the market during the '80s and '90s found themselves putting their entire retirement into these amazing technology stocks. Many of these investors had no idea that technology stocks were risky because they just seemed like they would keep going up forever. With more and more investors putting their money into online trading accounts, many investors no longer had their broker s to give them investment advice.

As we all know, technology stocks did correct and many investors saw their life fortunes disappear in front of their eyes. Many of the investors who did not stay with fundamentals and changed their investment styles to adapt to an overvalued market have found themselves wishing that they had stayed with their original investment philosophy. Of course this is all looking back in retrospect. The important thing to do now is to realize how important it is to stick to fundamentals and to avoid the hype when it comes to our investments, especially if we are investing for our retirement. Here are some basic investment fundamentals that may help you going forward in today's market:

1. DIVERSIFY AMONG ASSET CLASSES: It is always a good idea to diversify your investments between different asset classes (bonds, stocks and mutual funds). The amount of money you put into the...