Don't Sacrifice Growth for Stability of Principal
          
          
               What percentage of your money should be invested
          in common stocks or stock mutual funds?  One financial
          expert suggests a simple formula of subtracting your
          age from 100 to determine the appropriate allocation of
          investment dollars to equities.  For example, if you
          are 50, half your investments should be in common stock
          or stock mutual funds.
               However, most people have much less invested in
          equities than they should.  Of all mutual fund
          investments, 70.5 percent are in bond funds and money
          market funds; only 29.5 percent are in equities. 
          Retirees often have their money too conservatively
          invested, thinking only about stability of principal. 
          Even young people often have too large a portion of
          their portfolios invested only in fixed-income
          investments, which traditionally have yielded much less
          than common stocks.
               No one should have all of his or her investments
          in growth securities.  However, it is equally dangerous
          to be totally invested in short-term income securities. 
          For example, in 1981, $250,000 invested in certificates
          of deposit would have provided more than $3,000 of
          income each month.  Today, just 13 years later, that
          same nest egg would yield less than $700 in monthly
          income.  Although the principal has remained safe,
          monthly income has decreased more than 75 percent,
          while inflation has continued to increase the cost of living.
               Although common stocks and stock mutual funds
          offer some short-term market risk, serious, long-term
          investors know that equities also offer the opportunity
          to stay ahead of inflation and keep income growing.
               Staying ahead of inflation is particularly
          important to retirees.  Today, a 70-year-old has a 63
          percent chance of living another 15 years.  Inflation
          as low as 3 percent annually will reduce purchasing
          power by more than half in those 15 years.  Selecting
          only fixed-income investments may not allow investors
          to stay ahead of inflation.  Common stocks of large
          corporations, on the other hand, have yielded an
          average of 6 percent more than inflation since 1926.
               If you are heavily invested in fixed-income
          securities such as U.S. Treasuries or CDs, and you want
          to add some growth to your portfolio, how should you
          begin?  First, don't try to do it all at once.  Early
          redemptions could cost you penalties.  Plan ahead, and
          find out when your securities mature.
               Next, decide how much of your portfolio should be
          invested in common stocks or equity mutual funds.  As
          your securities mature, or as new money becomes
          available, gradually move it into the new investments. 
          Typically, taking one to two years to adjust your
          portfolio is best.  This allows for market fluctuations
          and reduces your exposure to unexpected drops in the
          market.
               Selecting only fixed-income investments may avoid
          the risk of losing principal, but it also may expose
          you to the biggest risk of all -- outliving your nest
          egg.  Don't forget about the importance of growth and
          staying ahead of inflation when choosing your
          investments.