Investors' move out of tech issues hurt growth funds, which invest stocks that reinvest dividends. Ten to 12 to 15 percent annual returns are still quite good, but investors had that as a monthly expectation versus an annual expectation. Although 2000 wasn't the year for technology funds, financial planners don't recommend dumping them entirely. After all, they say, Americans are quite attached to their cell phones and computers. What investors should do in 2001, or any year, is diversify their portfolios to include funds that hold companies of differing sizes and in a variety industries, said Lee, the financial planner.
Nobody knows what's going to happen next year.
That's why I say diversification is very much alive. You want to be exposed to all different sectors.