QTR. RETURNS

Ugly markets can spell o-p-p-o-r-t-u-n-i-t-y

Here's the deal: For the third quarter, June 30 through Sept. 30, the average equity fund was down nearly 18 percent; year-to-date, down almost 24 percent; and off over 28 percent for the year ending Sept. 30, according to Lipper.

A couple of years ago, some fund investors would have never believed those kinds of returns were possible thinking ---as many have during extend bull markets --that trees grow to the sky. But those who have been around for any length of time know otherwise. Take Peter Lynch, for instance. He's vice chairman of Fidelity Investments and the man brought the Magellan fund to life.

Lynch knows that market fluctuations are normal, market volatility can be painful, and that historically, the U.S. stock markets have weathered every storm that's come their way. For example, Lynch tells us that over the past 50 years there have been nine recessions and nine recoveries from those recessions. And, since World War 11, that corporate earnings are up 63-fold and the stock market up 71-fold.

He's also optimistic about stocks over the long-term. Long-term meaning at least five years, if not 10 and 20 years.

Eric Wiegand, the equity strategist for the Private Client Group of Credit Suisse Asset Management, also has an optimistic long-term view of things. "If you have a long-term investment horizon, I think that there are some very compelling opportunities out there," he says pointing out that the appropriate way to look at the market is not from day-to-day but one year to the next.

So, if you've got a long-term investment horizon, maybe now is the time to consider investing in the funds that you'd always wanted to but never did; the time to add money to the funds you already own; the time to continue to dollar-cost average into any of your existing funds held in your qualified retirement accounts; or the time to dollar-cost average into others.

But before adding new money to your exiting accounts, or, the market in general, take some time to review what you already own, and, your tolerance for risk taking.

Wiegand suggests that investors need to make sure that they're investment time horizon and their risk tolerance are accurately reflected in their asset allocations. " This is not just simply a function of whether stocks are cheap or expensive, or interest rates are going to rise or fall," he says. "It's really making sure that if you're a long-term investor, that you have yourself positioned to weather the boom and the bust that we invariably see during a market cycle."

If time, however, isn't on your side and you're going to need your money within the next couple of months or years, stock funds aren't typically advised by pros. Uncertain market conditions combined with the cost of fund ownership ---which includes everything from a fund's sales charges to its annual maintenance fees---are hurdles it takes time to overcome-- even during the best of market times.

Bottom line: Not only do time and money go hand in hand, but so do adversity and opportunity.