Q. I have been invested in the 401k plan with the company I work. Last year I put money in technology, computers, and electronics with Fidelity investments. I have lost most of my money. Do you think I should sell or leave them alone because I have all of them with long-term investment and cannot take money out anyway? Do you think I should put my 10 percent of salary into other investments such as mid-cap or biotech?

I am not good in how to invest my money. I have some money in Metlife that earns about 6 percent interest a year, but one co-worker told me that I would not make any money if I invest in Metlife. What do you suggest?

---S.A., by e-mail


A. Humility is the first step to becoming a good investor and you've just taken it. From what you wrote I gather that you have a 401k plan from Fidelity and that it has a great many choices, including funds that specialize in technology and electronics. The reason most people lose money, most of the time, is that they arrive at the party late and quickly get loaded with a little knowledge.

I suggest that you take the following steps.

•           Pretend that you are starting over with a new account that happens                  to have your current dollar balance in it.

•           Commit the majority of your money---90 percent--- to a balanced fund                that works like a typical pension fund. A typical pension fund has                an asset allocation that is about 60 percent stocks, 40 percent fixed                income. Fidelity Puritan meets the description and is frequently                found in Fidelity 401k plans.

•           If you have a desire to 'try your hand' at investing, put the                remaining 10 percent in a fund that you choose from the plan. Write                down the reasons it is your choice and follow it.

•           Do the same thing with your new contributions.

•           If you discover that you make bad choices year after year, do                yourself a favor and "retire" as a money manager. Put 100 percent of                your money in a pension fund like choice and concentrate on your job.                If you discover that you make good choices, keep on making                them--- but don't be tempted to expand the amount of money that you                invest in your choices.


Q. I have about $25-30k in debt, mostly credit cards, that I want to pay off in the near future. I also have about 3,000 shares of Exxon stock and an income of about $51,000 a year, including dividends. I am approaching 50 and have rental property that is also providing income. My question is whether to sell enough stock--- or take out a line of credit on the rental property to pay off the debt. I know how hard it is to accumulate enough for retirement, and therefore I struggle with this dilemma. My stockbroker advises selling the stock. What do you say?

---J.L., Lufkin, TX


A. At a recent price of $89 a share your ExxonMobil (ticker XOM) holding was worth about $267,000 and was paying $5,280 a year in dividends. The alternative to selling a portion of these shares is to borrow against your rental property. This will probably come at an interest rate of at least 10 percent. While that would be about half of your credit card interest rate, it's still high.

So I agree with your broker. Sell a portion of your ExxonMobil shares and pay off the credit cards--- provided that you also destroy the cards so it doesn't happen again. Remember to sell enough shares to cover the capital gains tax expense of the sale--- there are many, many ExxonMobil shareholders out there who have held so long their cost basis is virtually nothing. That means there could be a significant capital gains tax on the sale.