One sector of European stocks offering opportunity to investors, for example, is telecommunications. New technologies and deregulation are reshaping that entire industry. In addition to redeploying your technology stock or stock fund profits into international or overseas regional stock funds, Hamacher suggests keeping some money in bonds. Bonds are sporting attractive yields today. If rates keep rising, bonds could offer stiff competition to stocks.
Bonds also help cushion the blow of stock market losses.
Typically, when stock prices decline, money moves into bonds, helping to push up their prices. The increase in value of the bonds, plus its interest income offer some protection against stock market losses. Alan Lavine and Gail Liberman are husband-wife personal finance columnists, journalists and authors. Their columns appear in newspapers throughout New England and the Southeast, as well as online. Their commentary on mutual funds and personal finance is carried by 200 radio stations nationwide every Sunday over Business News Network's Charles DeRose Financial Advisor Show.