A SHOT OF INVESTMENT ADVICE.

Injecting financial knowledge can cure an under-performing portfolio

Dr. Denise Brathwaite proves that being a proactive and informed investor is the right medicine for healthy finances.

WHEN DR. DENISE BRATHWAITE STARTED HER PRIVATE practice in 1990, she decided to set up a tax-deferred Keogh retirement account. Designed for the self-employed, Keogh accounts allow annual contributions of up to $30,000. Relying on the advice of a full-service broker, Brathwaite, who was 28 at the time, invested her money in very conservative mutual funds.

"But at the end of the year I noticed that my portfolio had significantly underperformed the market," says the Los Angeles-based anesthesiologist. She then realized she needed to educate herself about the fundamentals of investing and take matters into her own hands. She read books and learned as much as she could. At that time there wasn't the abundance of information you can find on the Net today, "but around 1994 you did have online services where you could download charts daily and keep track of your investments. I was very into technical analysis," she says.

It wasn't until a few years after opening her Keogh account that Brathwaite felt comfortable using her newfound knowledge. She began investing in individual stocks and opened up another brokerage account, this time through discounter Charles Schwab. While she practiced a buy-and-hold philosophy with her retirement portfolio, she aggressively traded in and out of her stock portfolio.

Her investment strategy was to invest in large-cap growth stocks of well-known companies. One of her first stock purchases was Microsoft (Nasdaq: MSFT), which she bought before it released its Windows 95 software program. It is still one of her major holdings, as are Cisco (Nasdaq: CSCO), Nokia (NYSE: NOK), and Medtronic (NYSE: MDT).

Looking to the future, she plans to diversify her portfolio more and wait out the market downturn. She is waiting to see which new sectors (e.g., energy and defense) will emerge as market leaders. To keep her fingers on the pulse of the market, Brathwaite continues to faithfully read the business section of daily newspapers and Investors Business Daily. She also logs on regularly to financial sites such as Wall Street City by Telescan Inc. (www.wallstreetcity.com).

Follow this doctor's orders by embracing Black Enterprise Declaration of Financial Empowerment principle No. 2: to be a proactive and informed investor. This means using every available resource to help you make decisions about when to buy, sell, or hold on to stocks, bonds, mutual funds, and other investments. To get started, apply these guidelines:

* Understand the basics.

You can supplement your knowledge of a company by reading industry trade publications, company directories, annual reports, stock and bond guides, and financial newsletters. In fact, the Hulbert Financial Digest (703-750-9060) provides monthly appraisals of newsletters and investment advice.

* Take courses on investing at your local college. Also, consider attending seminars sponsored by investment groups. For instance, the Coalition of Black Investors (336-922-6240; www .cobinvest.com) hosts conferences across the country that teach beginners about investing. The Winston-Salem, North Carolina-based group offers memberships: $25 for individuals; and various packages for investment clubs. Members receive educational materials and a quarterly newsletter as well as a list of African American brokers and brokerage firms. Another group, the american Association of Individual Investors (800-428-2244; www.aaii.com), based in Chicago, offers seminars as well as Standard & Poor's stock reports and Morningstar mutual fund reports on its site. For a $49 annual membership fee, investors receive guidance on investments and tax issues.

* Consult financial advisors. Today, Brathwaite has a different broker: someone with whom she gets along personally, is accessible, and helps her meet her investment goals based on her risk tolerance. You should also secure a financial advisor to help you assess your financial goals. Whether you're a novice or a pro, the right professional can help structure a lucrative portfolio or asset mix based on your financial goals, age, and risk tolerance.

* Read up on investment strategies. Novice investors should start with the following resources: Black Enterprise Guide to Investing by James A. Anderson (John Wiley & Sons Inc., $19.95); Getting Started in Stocks by Alvin D. Hall (John Wiley & Sons Inc., $18.95), Black Enterprise Wealth Building Kit (877-WEALTHY; www.black enterprise.com), and The Millionaires' Club: How to Start and Run Your Own Investment Club--And Make Your Money Grow! by Carolyn M. Brown (John Wiley & Sons Inc., $19.95). The more you know, the better your portfolio will do overall. You should "empower yourself by researching and understanding your investments so you can be an active participant in attaining your financial goals," says Brathwaite.

DECLARATION OF FINANCIAL EMPOWERMENT

From this day forward, I declare my vigilant and lifelong commitment to financial empowerment. I pledge the following:

1 To save and invest 10% to 15% of my after-tax income

2 To be a proactive and informed investor

3 To be a disciplined and knowledgeable consumer

4 To measure my personal wealth by net worth, not income

5 To engage in sound budget, credit and tax management practices

6 To teach business and financial principles to my children

7 To use a portion of my personal wealth to strengthen my community

8 To support the creation and growth of profitable, competitive black-owned enterprises

9 To maximize my earning power through a commitment to career development, technological literacy and professional excellence

10 To ensure that my wealth is passed on to future generations