Declining Retirement Funds Require Strategy Overhaul.

ARE you ready to start again? I mean, restart the way you think about investing.

For the past few years, everything seemed easy. Most stocks rose. Every time you opened your 401(k) statement, it was worth more. Growth mutual funds soared. Some of your stock picks reached the moon. You thought investing was easy.

A year ago April, the market started to take stocks out and shoot them -- especially the technology, Internet and telecommunications stocks. Some blue chips dropped even earlier.

But there has been surprisingly little selling, considering the carnage. You're holding stocks for the long term, so you fully expect them to recover and exceed the price you paid. The recent market bounce gave you a thrill.

Alas, many of you will be disappointed -- especially if you're holding techs, Nets and telecoms. The odds are, they'll underperform.

Your strategy needs an overhaul. If you don't act now, you could lose more money or bog down with stocks that don't recover for years. Here are some questions to ask yourself:

* Is all your mutual-fund money in growth and aggressive growth funds? If so, you've been concentrated in techs because that's where the funds were making their explosive gains.

You think techs are forever but they're a fad. In the 1980s and early 1990s, they did worse than the market as a whole. They caught up spectacularly in the late '90s but since then have plunged 50 percent or more. Their gains in March and April don't come close to making up the loss.

What to do? Sell some of your "growth" holdings, even at a loss, and diversify into other types of funds. Look for "value" funds, which own hardly any techs. Over the past 12 months, value funds gained while growth funds lost.

* Have you been buying stocks based on their price momentum? This can work, for canny people. But if you're showing big losses, that's because you bought info only half the story.

Momentum investors look for a stock whose price is rising and jump aboard. You pay no attention to any measures of the stock's underlying value. You simply expect other people to pay an even higher price.

If the stock falls for several days, a momentum investor should sell fast. You should expect other people to be dumping, too.

Instead, a lot of players bought more when their stocks went down. They switched from being momentum players to "true believers," who thought their stocks could never lose.

What to do: Give up momentum playing. For the average investor, it's a loser's game. Investing is supposed to be boring. Buy some mutual funds and blue chips and get your kicks out of something else.

* Are you afraid to open your 401(k) statement? Many savers are suffering from "statement shock." You're used to seeing the value of your retirement plan go up (especially counting your contributions and whatever the company puts in). You don't want to face any more bad news.

But this is a good time to reconsider what you're doing. For example: When the value of your account goes down, you should save more, not less. Raise your contribution, if you can.

Put your money into just a few well-diversified funds, for stocks and bonds.

Most importantly -- hold down the amount invested in your own company's stock. Ideally, it shouldn't exceed 5 percent, no matter how well the company has done in the past.

Think about Lucent -- soaring, after it was spun off from AT&T in 1996, but since January 2000, down a frightening 87 percent. If you were close to retirement, could you handle that kind of loss?

Some companies force you to own a lot of their stock. They match your contribution with stock and don't let you switch to something else.

Shame on them. All you can do is put every penny of your own money somewhere else.

Federal Student Loan Rates Set to Fall

Do you have a federal student or parent loan? A lovely surprise is coming your way, starting July 1. The interest rate will fall, probably by a lot.

You won't know the new rate until the end of May. But it's expected to drop by around 2 percentage points.

If you make the right moves, you can lock in some additional discounts. Your total rate on student loans could dive to a little over 5 percent!

So you'll want to act. Look through the list to find your situation and what, if anything, you should prepare to do.

Here's how the rate cuts apply to different types of borrowers:

* If you're out of school and repaying your original student loans. Your interest rate will drop automatically on Stafford loans taken after 1992. Written notices will come out in June, saying what your new payments are.

* If you have the monthly payments with drawn automatically from your bank account. You can save another 0.25 percentage points.

* If you want to consolidate your student or parent loans. After July 1, you'll be able to lock in a new, low fixed rate that lasts for the life of the loan. The exact rate will be announced at the end of May. Students might get around 6.8 percent on recent loans. (Earlier loans have different rates.)

Loan consolidation needs a little more explaining. Special discounts often are available.

To "consolidate" means that you combine all the different, loans you took during your student years into a single loan, at a new interest rate.

There are two potential discounts.

1. If you apply for a consolidated Stafford student loan within six months of leaving school, you save an additional 0.6 of a percentage point on the rate. Right after school is the best time to apply. New graduates, take note!

2. If you consolidate a student loan or PLUS loan through the government's Direct Loan program between now and Sept. 30, you can get an additional rate cut of 0.8 of a percentage point. To keep this rate, you have to pay on time for the first 12 months.

Jane Bryant Quinn