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Suggestions on balancing mutual-fund portfolios


How do you select your mutual funds?

"You're busy. You don't have time to slog through research on all 10,945 mutual funds," says Family Money. "If you choose the 'hottest' funds, you could run into trouble. Without warning, today's stars can turn into tomorrow's has-beens. Buy solid, long-term performers from several categories, so your portfolio is well diversified."

COLLEGE CASH: "As your child gets older, your college savings portfolio must evolve -- fewer stocks, the rest in bonds and cash. Prudent models: Ages 0-14, stocks 80 percent to 100 percent. Ages 15-18, 50 percent stocks. Ages 19-22, reduce stocks to 25 percent. (College Money, a financial planning firm)

BE CAREFUL: "If you plan to settle in for 15 or 20 years, don't buy an adjustable-rate mortgage, even if the rate is lower. When the adjustable portion kicks in, rate increases could wipe out any savings." (Money, April)

MONEY MATTERS: "Median amount of debt owed by households now stands at $33,000, a 42 percent increase over 1995. -- Median household income for 1998 was $33,400, up slightly from 1995. ... Median net worth of households in 1998 was $71,600, an 18 percent increase over 1995." (Federal Reserve survey)

WALL ST. WATCH: "As retirees live longer these days, living costs will increase. Stock funds are more likely than bond funds to generate the necessary returns." (Black Enterprise, April)

"Trust your own judgment and don't listen to everybody. Everyone in my office said the market had peaked, so I ignored my better judgment and sold Cisco Systems Inc. and Intel Corp. I figured I'd buy them when they came down again, but they never came down that low again." (Muriel Siebert, owner, discount brokerage)

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