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NewsDecember 11, 2000

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson. When the stock market keeps going up, it's easy for investors to feel confident about their abilities to pick winners. But what happens when the going gets rocky?...

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

When the stock market keeps going up, it's easy for investors to feel confident about their abilities to pick winners. But what happens when the going gets rocky?

That's when it's time to turn to the experts.

At least, that's one of the findings of the Investor Confidence Index, a semi-annual survey sponsored by the Forum for Investor Advice, a nonprofit association of financial-services firms. During the extreme volatility of the market earlier this year, many people lost confidence in their own investing abilities, according to the survey. At the same time, the number of investors who expressed a great deal of confidence in investment representatives rose sharply.

Many investors came to realize that they could benefit from professional financial expertise during times of market volatility. However, good investment representatives will prepare their clients for every type of investment climate. In fact, if they do their jobs correctly, they won't get a flood of calls when the market is choppy. That's because their clients know the financial markets will always fluctuate -- and they don't panic when the "ups" turn to "downs." They follow personalized, long-term investment strategies instead of making vain attempts to "time" the market. They build diversified portfolios instead of chasing today's "hottest" stocks.

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Where can you find an investment representative who will show you these things? Here are some suggestions:

*Ask for referrals -- Ask your friends or relatives who they use for professional financial expertise. Find out what it is they like about the person with whom they work. Is he or she a good listener? What about being knowledgeable about new products, services and laws? Accessible? If you get glowing reviews, you may decide that this is someone you'd like to talk to.

  • Interview prospective investment representatives Don't be afraid to ask for interviews with financial professionals. Find out how they work, how they get paid and if they've had experience with people whose financial situation is similar to yours. Learn what areas, if any, they specialize in. Ask what licenses they hold. If they work for a company, find out the company's investment philosophy. Above all else, see if you sense a rapport between the two of you. If you become a client, you'll be divulging some of the most personal details of your life -- so you'd better feel comfortable with this person.

* Hold a tryout -- Even after you've chosen an investment representative, don't just assume that you're set for life. In your mind, give the person you choose a set time period -- say one year -- to prove that he or she is truly providing you with a valued service. And base the tryout on the investment representative's ability to understand your needs and objectives -- not just on his or her short-term performance. If, at the end of the tryout period, you're not satisfied, then find someone else. Remember, you're the client, and you're the one whose needs have to be met.

Once you find someone who does a good job on your behalf, stick with him or her. Don't bolt for somebody who promises stratospheric returns. If they sound too good to be true, they're probably neither.

The Southeast Missourian does not recommend that readers buy or sell stocks featured in this column, which is provided for informational purposes only.

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