Portfolio hard-hit by market

Q – I have lost 2/3 of my portfolio in the last two years and am scared to death about losing the rest. I am 67. I might add that of that 2/3, about 1/3 was lost in the Templeton Fund. What should I do? – J.A.

A – Regarding Templeton, I think you’re mistaken in your calculations. Templeton Growth Fund (which I assume is what you are referred to) just about broke even in 2000 and 2001 – marginal losses of less than 1% in both years. Year-to-date 2002, it is down about 13.6% to the beginning of August. So over two years, your Templeton Growth Fund assets would have fallen about 14% in value. That’s a long way from 1/3 of your portfolio value.

If you have suffered such heavy losses, it is because you are too heavily invested in equities, especially at your age. I have long recommended a balanced approach to investing, using a 50-40-10 (stocks, income, cash) formula as a base. You should consult a financial advisor about the right asset mix in your situation but I would guess it would probably be something like 35% stocks, 55% income securities and 10% cash. – G.P.