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Don't worry; stock buyers are still out there

Q. A brokerage house has changed its recommendations from hold to sell for a utility stock I own. Now, who would buy when the brokerage says sell? I am afraid I am a slow learner and an underachiever.

A. Who would buy? Investors who are bargain hunting or who happen to have a higher opinion of the stock's future prospects.

If you think about it, any stock transaction involves a fundamental difference of opinion. One person considers the stock a buy, the other considers it a sell. Unless a company is bankrupt, there are are always buyers. The question is not whether anyone will buy but how much the buyers will pay.

Few investors use an analyst's opinion as their only source of information when making a decision. When multiple analysts follow the same company, they often disagree in their ratings.

One reason a "sell" rating is startling is that in the past brokerage firms rarely uttered the word, preferring euphemisms such as "hold" or "underperform." Pressure on brokerage analysts to prove their independence means you can look forward to seeing more such "sell" opinions.

Q. My former broker, against my wishes and without consulting me, put my money into aggressive high-tech mutual funds in 2000 and I lost $75,000. I moved to another brokerage firm last year where I repeatedly asked what changes I should make. I was told none as the markets would surely pull out of this slump. My account, which was once worth $110,000 is now worth less than $10,000. I am on my third broker, who has recommended switching to a balanced fund. I am 79 and widowed and have no one to advise me but brokers. What should I do?

A. Learn to speak up. Nobody cares about your money as much as you do. Turning your money over to someone else and quietly accepting everything they do is giving away far more power over your life than is prudent.

When you open an account, it is vital that you clearly convey your objectives to your broker. Did you tell your first broker that you wanted to make as much money as possible? Or did you tell him preservation of principal was your highest priority? Did you explain how much of your net worth this account represented? It makes a big difference if this is most of your money or just a small part of it.

When a broker makes recommendations, ask for an explanation of how these investments will help you achieve your objectives. Ask for written information and take time to study what's provided. Find someone who can serve as a sounding board for your investment ideas. That might be your tax preparer or a neighbor who works (or worked) in financial services and is more knowledgeable than you are. If something doesn't make sense to you, don't do it.

When a broker makes unauthorized trades in an account, complain loudly to the broker and to the branch manager, demanding to have the trades reversed immediately. From the brokerage firm's viewpoint, silence is consent. The longer you allow a situation to persist, the more it looks like you agreed to the trade.

Unauthorized trading and recommending unsuitable investments are serious issues. You should consider taking your complaint to the Florida Division of Securities toll-free at 1-800-848-3792. If that effort does not produce results, the next step is to consult a lawyer.

A balanced fund certainly sounds like a more suitable investment for a 79-year-old than an aggressive high-tech fund, but you may not belong in stocks at all. What is right for you depends on your objectives, your net worth, your risk tolerance and how you have your other money invested.

Online Money Map

If you are a stock investor who likes to keep tabs on earnings news, bookmark the Open Corporate Disclosure Network ( At this site you will not only find dates and times for upcoming announcements, you also will get links to listen in on conference calls broadcast over the Internet.

_ Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, send it to On Money. We'll try to answer those we think are of greatest reader interest. All questions must be submitted in writing, but readers' names will not be published. Send questions to Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731.