WANT MORE income with safety? "Even after the market decline, the S&P; 500 dividend is only 1.6 percent," says Moneypaper. "Quality stocks paying higher dividends are good buys now, especially if their dividends grew steadily and their current yield tops the average payout over five years."

Several readers ask about the pros and cons of convertible bonds. "Convertible bonds convert into common stock at a determined future date," says money manager Christopher Wiles. "Convertibles pay fixed dividends, and their conversion values are set so your stock is worth more than regular common stock if the stock price falls -- but less if it rises. The dividend compensates for some profit you forgo if the stock rises more than expected."

To avoid paying capital gains taxes, give appreciated stock, not cash, to charities. "If you donate stocks or mutual funds you owned for more than a year, deduct their market value and pay no gains taxes," says Kiplinger's Personal Finance Adviser. "To transfer stock to a charity, sign over the stock certificate, or your broker can transfer shares for you."

Hate to suffer through down markets? "The bear market proved fantastic for people who stayed in stocks, studied values and increased their holdings," says Better Investing magazine. "Nobody knows where the market will go, but staying with a disciplined program of regular investing has rewards regardless of what bulls and bears bring tomorrow."

Pub Date: 11/18/98