Getting the scoop on investing; tune in to our panel of financial news commentators as they offer the best strategies for building your portfolio. (Investment Roundtable).

YOU'RE ON YOUR OWN.

That's just part of the harsh new realities of investing in today's environment. Yes, you should consult with financial advisors, but use them as part of your resource network. You can no longer afford to be a passenger, allowing others to steer your investment decisions. You must command the driver's seat.

Why? Recent events dictate such urgency. By now, you've heard the horror stories about legions of employees who had their retirement funds wiped out in the Enron scandal. In recent months, fed up investors have complained to regulators about conflicts of interest inherent in analysts pushing clients' companies. Others have started hawking shares of companies with head-scratching accounting measures. And examples of individuals who have been bilked in scams--ranging from money managers skimming customer accounts to tax frauds involving slave reparation claims--abound.

Even if you believe you're working with the best, the brightest, and the honest, take charge of your financial destiny. The best place to start is acquiring knowledge through reliable, unbiased information from trusted sources. To help you get plugged in, we've assembled our roundtable of experts that include financial news reports and money managers who double as television market commentators. They are:

* Sharon Epperson, a correspondent for CNBC Business News who has appeared on the network's popular Business Center program

* Karen Gibbs, anchor and senior business correspondent for Your World with Neil Cavuto on the Fox News Channel

* Valerie Coleman Morris, a financial anchor for the "Smart Assets" desk for CNNfn (CNN Financial News)

* Eric McKissack, vice president and portfolio manager for the Ariel Appreciation Fund, a mid-cap fund, which is one of the top 70 mutual funds (see "Which Way is Up?" in this issue), and a guest on Wall $treet Week

* Charles Payne, founder of Wall Street Strategies, a New York investment advisory firm, who appears regularly on CNNfn, ABC News, and Yahoo! FinanceVision Website.

BLACK ENTERPRISE: Last year, we witnessed the tragic events of Sept. 11, an economic downturn, and a market decline for the second consecutive year. What is your outlook for the economy and the market in 2002?

SHARON EPPERSON: When I'm talking to regular folks, [I find that] they are shell-shocked from what has happened over the past two years. But they are still very interested in being a part of the market. They are trying to come up with a plan for college savings, retirement, [and] preserve money they still have in the stock market. There was a time when [investors] were so enthusiastic about the run-up in technology and not really focused on what companies were really about. Now, people are really focused on how [to] make investments grow for the long term.

KAREN GIBBS: I'm very bullish for what is getting ready to happen this year for several reasons. [One of which is] very low interest rates. Right now, it does not pay to put your money into a savings account. [These rates] will force people back into the stock market. Because of the fiscal stimulus coming out of Washington, D.C., we will be shifting more toward a guns-vs.-butter economy. We won't have the technology leadership, but we will have some of those old standbys--value stocks--that will help us pull this market out of the doldrums. I'm also very impressed with the way the market has been so resilient after Sept. 11. In fact, the gains we have made since the post-attack low on September 21 are quite impressive. If you look at the historical perspective, this is the first time that we've seen two back-to-back yearly losses, since 1973-1974. If you go back and see what happened in 1975, stock markets roared to life and we saw a 30% rate of return for the Dow [Jones industrial average], Nasdaq [composite index], and Standard & Poor's 500.

VALERIE MORRIS: I try to look through a personal finance lens [with] a multigenerational view. We have the largest amount of wealth being transferred than ever before. That transference of wealth is one of the reasons why people are more interested in understanding the markets.

One of the most important things we have to look at is "the sandwich generation." Who is the sandwich? We are. The upper end of the [baby] boomer population [includes] people who have a finite amount of money [and] are trying to get ready to retire. They've made good plans, but they didn't necessarily count on the bubble popping. The generation X children we've produced were at dot.coms and lost money there, or [they gained] skills with narrow marketability. Now, they are out of a job [and] returning home. You also have frail parents who are living longer, [and] they may be outliving the money they so judiciously set aside [for] their golden years. So, it's not just what do my husband and I have set aside for us. It has to be what does [the investment strategy] mean to these three generations. Boomers will have to deal with this over the next 20 years.

B.E.: What has been the impact of Sept. 11 on investing trends?

ERIC McKISSACK: Our view is that our community, as well as all investors, should take a longer view. As students of history, we compared [the attacks] to other catastrophic events like the Gulf War period or the assassination of [President John F.] Kennedy. We've seen that the market has sold out very dramatically after those [events] but recovered very quickly. That's kind of what we have seen with this event.

We're looking at 2002 with a cautiously optimistic eye, and we remain encouraged that the area that we focus in--value investing--will probably continue to fare very well through what is an uncertain environment. Investors who have been sitting on the sidelines should not do that. You should use these periods to reallocate [your assets].

B.E.: Are African Americans confident about the market or have they started retrenching?

McKISSACK: The 2001 [Ariel Mutual Funds/Charles Schwab & Co. Inc. Black Investor Survey] showed that we are more sensitive to market volatility. [It showed that] 88% of African Americans expect occasional market corrections vs. 95% of white investors. Also, 52% of African Americans agree with the statement: "The recent stock market volatility will have little impact on your ability to reach your long-term financial goals." [On the other hand,] 68% of the white counterparts agree with that statement. We have a lower tolerance for volatility and risk. The main reasons are the lack of trust, knowledge, and exposure, as well as other cultural issues.

The good news is that we are increasingly active in the stock market. We still haven't caught up with the mainstream population but 69% of African Americans owned stocks, in our 2001 survey, vs. 57% in 1998, and 64% in 1999. Ownership among whites, during the same period, remained fiat, at about 80%. So, we're closing the gap.

MORRIS: We're talking about two [investor] populations within the black community. There are about 10% to 15% of black Americans who control 70% to 80% of black wealth. Then, there is the 75% to 80% who control the other 20% to 30%. So, today's African American investors have a greater concern about market volatility because they know if the dominant culture catches a cold, then we catch pneumonia. Wealth building is new to us. We need to be educated about how we manage it.

CHARLES PAYNE: A lot of people--black people particularly--who just came to the market, came in at the wrong time. It's really important that they become students of the market, and understand that they have got to wait this period out. One of the unfortunate things is that a lot of stocks are not going to come back. It's going to be a real bitter pill [to swallow].

B.E.: What strategies should investors employ to deal with continued volatility?

GIBBS: I'm a proponent of dollar-cost averaging [committing to invest a specific dollar amount each month], which works very, very well in extremely volatile markets. It keeps you focused on a constant stream in investments. You get more shares the lower the price and it effectively lowers your break-even price. [Dollar-cost averaging is] a very simple tool [for investors] to use to invest in the market and benefit from volatility.

EPPERSON: One investment tool that seems to be something that a lot of folks are getting into is 529 state-sponsored college savings plans. Many of them offer you a state tax deduction so you're saving for your child's college education [while] investing in the market. Again, someone else is investing this money for you. You're not picking stocks yourself, but you know that money is in there no matter what happens to the market. You're riding out the volatility.

B.E.: Should investors develop a sell strategy as well as a buy strategy in this environment?

PAYNE: I'm a proponent of using stocks to protect profits. There isn't a person around who bought stocks in the last three years who didn't buy a stock at $30 that went to $100, and now it's $2 a share. If they were buying stocks in the last three years, they had one that was a grand slam and [they] didn't take any [money] off the table. If you are going to play the individual stock game, particularly when you're up, don't be so nuts. That's the greed factor. Again, emotion really destroys a lot of people. Discipline is important. Selling is important. You could always buy the stock back. You may or may not want to buy it back, but to watch [a stock like] Enron go from $70 a share to 50 cents is ridiculous.

McKISSACK: Your plan dictates something about your asset allocation. You may [decide to shift] to more bonds or cash as you reach certain life cycle events. The individual investments underneath those categories can hit their targets and you should be responsive to those, regardless of what is happening in the marketplace. And try to, whenever possible, not get caught up in the euphoria and emotion of a roaring bull market as we saw in 1999 and sell out of that stock. You may not get that $100 price, but at least you'll sell out of it at $70 or $80 [a share].

B.E.: What is the current psychology of the individual investor?

PAYNE: Certainly, in 1999--2000, [investor] arrogance was outrageous. By the same token, from 1995--2000, you had an intriguing phenomenon, which was the result of the Internet, primarily, [and] television [networks like] CNBC and CNNfn. They gave investors access or piqued their interest about the game. They wanted to rewrite the rules.

The self-directed movement, in my opinion, is here to stay. [Investors] are always going to want to be in control. They want to be the pilots [and] are willing to let other people be the navigators. I still feel like investors want to know more. They are not just going to wait for a broker to call them and say buy this. Even with their 401(k)s, they are going to want to know more about what fund managers are doing [and] what their track records are.

GIBBS: The returns or the lack of returns that a lot of people are seeing [on their] 401(k) quarterly reports [have caused them to raise] a lot of questions [such as,] "Why am I paying these fees for funds that are not giving me any type of return?" I think that is going to trigger a lot more self-directed [investors to] educate each other instead of just turning it all over to someone.

EPPERSON: In the last couple of months, [people are] looking at a company like Enron and the amount of money that those employees have lost in their 401(k) [accounts]. People are now is saying, "I got into this 401(k) because I believed that I needed to build wealth and also I believed in my company, so I put a lot of my money into my company."

B.E.: The Enron scandal has all but ruined investor trust. How can investors make sure they are receiving accurate and quality information from companies and analysts?

PAYNE: Enron is sort of unique because the company pulled the wool over just about everybody's eyes. You're always going to have an Enron out there. There is always going to be one company, every year or so, that we thought had it together, got certified from one of the top-five accounting firms, Wall Street loved it, [and] institutions owned the stock.

You have to listen to what Wall Street says. It's almost like reading a paper because whoever wrote that paper had an agenda, too. You take the facts out of it. Just like you would take the facts out of a story in the Daily News, you take the facts out of a presentation or an opinion from a Wall Street analyst, and then go and do some work on your own.

GIBBS: The homework is the thing that we won't do. We don't take people's advice [to] buy a Lexus. We go and drive it, kick the tires, go underneath it, [and] read all about it. When you buy a house, you have particular requirements. You want four bedrooms, two bathrooms, southern exposure, [etc.]. We don't do that when it comes to stocks.

MORRIS: I think that financial information really needs to be processed and made actionable. I think making it actionable is the thing that African Americans haven't necessarily known how to do. We now are getting it. There is a black presence [on financial television]. Whether we know the answers or not, there is something that happens when people turn on the television and they [see] a face like [theirs]. They will listen not just because we're African American or we're going to give them better advice. There is this psychological sense that you know where the hurdles and the obstacles have been, and you know kind of where they want to go.

EPPERSON: One of the things that came from the Enron [scandal], if you don't understand [the investment], do not buy it. That's particularly true for individual investors.

One of the things I find really [helpful] is investment clubs. I love the amount of research some of our folks are doing now that this boom has really hit our community. They have pages and pages of documents, and charts they have developed looking into these companies. That is how you buy a stock, and if you can't do all that, then go to a mutual fund company.

McKISSACK: Mutual funds are a great place for the average investor to start rather than hearing about some stock tip on TV and deciding, OK, I'm going to buy that. That's pretty hard to do without a certain amount of information and knowledge. However, one can certainly buy into a diversified portfolio of stocks or a mutual fund with relatively low dollars, and you can tailor it to your needs.

Valerie Coleman Morris CNNfn

HER ADVICE TO OUR READERS: African Americans don't have an investment problem. We have a spending problem, and I think acknowledging that is really important. We spend what we make, and we spent it often on things that don't necessarily have a return on [our] investment. We need to become more financially literate and more politically astute. African Americans just don't vote enough. We have to vote intelligently on what impacts us financially.

Eric McKissack Ariel Appreciation Fund

Consumer Products. Despite the fact that people are concerned about consumers' buying capacity, there are still some good opportunities in areas that have some direct or indirect relationship to the [consumer products] area.

Media. [It] is going to be a consolidating industry, and many of the small- and medium-size players in that area are going to be beneficiaries.

Financial Services. The low interest rate environment will help many of them. Lending activity is slow, we will see a pick up in that activity over the course of the year.

Tribune. We like Tribune, a diversified media company with properties in the three largest markets. There is a prospect of improved advertising spending as well as its ability to use various platforms to benefit, over time, from changes in FCC regulations on TV and newspaper ownership in several markets.

Interpublic Group. It is a diversified advertising agency holding company. We are encouraged by the current valuation, the opportunity for cyclical recovery in advertising, as well as an improved positioning of some of its operating units.

MBNA. It's one of the largest pure play credit card issuers, especially known for its affinity marketing. It also has demonstrated extra skill at identifying a higher-than-average consumer by using a very good screening tool [and] individual observation of each application, not just a machine, to identify a good credit risk.

Cendant. This is a controversial stock. This name came up earlier but in a negative context. Cendant obviously will live in infamy [after] a huge $2.5 billion shareholder liability payment to settle [law]suits. We see a company with a tremendous number of franchises across a number of channels within the hotel franchise business.

Toys R Us. We've seen some [retail] stocks do very, very well post-Sept. 11. We like Toys R Us in that space. Its CEO came over from FAO Schwartz and has a very good vision of how to reposition the stores. Their new store format called Mission Impossible, is looking very promising.

                                    Price at       5-Year Estimated
Company (Exchange: Ticker)      Recommendation *   EPS Growth Rate

Tribune (NYSE: TRB)                 $36.65               13.4%
Interpublic Group (NYSE: IPG)        27.55               13.1
MBNA (NYSE: KRB)                     33.50               18.6
Cendant (NYSE: CD)                   16.05               13.0
Toys R Us (NYSE: TOY)                19.82               11.8

* AS OF JAN. 30, 2002

SOURCE: YAHOO! FINANCE.COM; ZACKS.COM

Karen Gibbs FOX News Channel

HER ADVICE TO OUR READERS: You have to be in it to win it. You've got to be in the market. You have to have some sort of plan and you can start with a little bit of money. You don't need a windfall. You don't need an inheritance. Stay disciplined, not only in your investing but also in your contributions.

Charles Payne Wall Street Strategies

Semiconductors. I like the idea of semiconductors. The most popular products that are still being bought, even in a recession, were driven by chips, whether [they were in] digital cameras, camcorders, Xboxes, PlayStation 2s.

Wireless Technology. If you're thinking [of] the future, m-commerce one day will be a reality. We'll have enough potential to send data through your cell phones, to ultimately download a movie on them. Those things make life easier, and that's why they will come to fruition one day.

Biotech. Biotech stocks recently have had a bit of bad news. They don't really have any blockbusters to follow up the pipeline. But still, you have to find a way to play on aging baby boomers. This is going to be a tremendous market.

Nokia. "On the wireless side, Nokia is obviously the way you want to play it. It is one of the few companies in the world that actually has pricing power. [Management has been] pretty aggressive and smart.

AOL Time Warner. [The company] has new management that has taken some real smart moves. It has tempered expectations so that, going forward, it doesn't have to score 100 points to be the star of the game. It can be more realistic, like Michael Jordan scoring 18.

Applied Material. It makes semiconductor equipment. It's a well managed company that delivers, [but it's in] a very cyclical industry. If you buy it at $40 and it goes to $70, consider taking it off the table, and not riding out the down periods.

Concurrent Computer. [This stock is] for the more aggressive investor. This is a company in the video on demand space that has tremendous potential. I would consider it higher risk because this industry hasn't materialized yet.

Open Wave. I want to label this one high risk. Open Wave is sort of a platform for wireless providers and getting data from landlines into handsets. It's a company that is so well positioned. Again, I add the caveat that it could be extremely volatile.

                                                            5-Year
                                         Price at          Estimated
Company (Exchange: Ticker)           Recommendation *   EPS Growth Rate

Nokia (NYSE: NOK)                        $23.18              18.4%
AOL Time Warner (NYSE: AOL)               26.40              23.2
Applied Material (Nasdaq: AMAT)           43.16              21.8
Concurrent Computer (Nasdaq: CCUR)        13.12              43.3
Open Wave (Nasdaq: OPWV)                   6.68              44.1

* AS OF DATE: JAN 30, 2002

SOURCE: YAHOO! FINANCE.COM; ZACKS.COM

Sharon Epperson CNBC Business News

HER ADVICE TO OUR READERS: If there is one thing that I'm bullish about, it's the potential of the African American community to gain [financial] parity with whites by developing a sound financial plan. It is not just trying to figure out how [to] get into the market and pick the best stock, but how they can make their overall investment strategy work for them. That starts with getting out of debt [and] taking some of the extra income you do have, and investing [it]. Then, ensuring you have proper life [and] disability insurance.

April 2001

War. Recession. Market turbulence. Last year's events challenged the stock-picking prowess of our four roundtable participants: Paul Viera, CEO of EARNEST Partners (No.6 on the 2001 BE ASSET MANAGERS list with $2.45 billion in assets under management); Eugene Profit, portfolio manager of the five-star Profit Value Fund (PVALX); Dail St. Claire, formerly of Amalgamated Bank and a former member of the team that managed the LongView Quantitative Fund; and Steve Sanders, president of MDL Capital Management (No. 7 on the 2001 BE ASSET MANAGERS list with $2.30 billion in assets under management). The money managers bore out a common assertion from financial experts: stick with value. Although you can't consider the showing anywhere close to stellar, the picks of Profit, a disciple of value investing, performed best: -1.11%. His top choice, Bank of America (NYSE: BAC), had a total return of 15.92%. Let's take a look at the big losers. Viera's four picks were mauled, producing a total return of -34.17%. The selections from St. Claire's quantitative model were zapped as well. They had a total return of 47.93%. By far, the worst of the lot was the stocks chosen by MDL's Sanders, which posted an abysmal total return of -59.50%.

Paul Viera, EARNEST Partners

                                        Price at              Current
                                         Recom-                Value
                              Current    menda-     Total      $1,000
Company (Exchange: Ticker)     Price     tion *    Return    Investment

SunGard Data Systems           $27.99     $49.88   -43.89%      $561.15
  (NYSE: SDS)
Barr Laboratories               73.15      73.38    -0.31        996.87
  (NYSE: BRL)
Powerwave Technologies          18.72      38.00   -50.74        492.63
  (Nasdaq: PWAV)
Rite Aid (NYSE: RAD)             2.26       3.88   -41.75        582.47

Portfolio Average                                  -34.17%
Current Value of $4,000                                       $2,633.12
  investment

* AS OF JAN 30, 2002

SOURCE: YAHOO! FINANCE.COM
Eugene Profit, Profit Value Fund

                                        Price at              Current
                                         Recom-                Value
                              Current    menda-     Total      $1,000
Company (Exchange: Ticker)     Price     tion *    Return    Investment

Bank of America (NYSE: BAC)    $61.66     $53.19    15.92%    $1,159.24
Microsoft (Nasdaq: MSFT)        62.85      64.00    -1.80        982.03
Home Depot (NYSE: HD)           49.07      44.75     9.65      1,096.54
Walt Disney (NYSE: DIS)         21.40      29.81   -28.21        717.88

Portfolio Average                                   -1.11%
Current Value of $4,000                                       $3,955.69
  Investment

* AS OF JAN 30, 2002

SOURCE: YAHOO! FINANCE.COM
Dail St. Claire, Amalgamated Bank ([dagger])

                                        Price at              Current
                                         Recom-                Value
                              Current    menda-     Total      $1,000
Company (Exchange: Ticker)     Price     tion*     Return    Investment

AMR Corp. (NYSE: AMR)          $25.02     $36.75   -31.92%      $681.00
Power-one Inc.                   9.90      45.00   -78.00        220.00
  (Nasdaq: PWER)
Tellabs (Nasdaq: TLAB)          14.93      60.94   -75.50        245.00
General Motors (NYSE: GM)       50.36      53.75    -6.31        936.93

Portfolio Average                                  -47.93
Current Value of $4,000                                       $2,082.93
  Investment

([dagger]) ST. CLAIRE'S AFFILIATION AT THE TIME OF THE ROUNDTABLE

* AS OF JAN 30, 2002

SOURCE: YAHOO! FINANCE.COM
Steve Sanders, MDL Capital

                                        Price at              Current
                                         Recom-                Value
                              Current    menda-     Total      $1,000
Company (Exchange: Ticker)     Price     tion *    Return    Investment

EMC Corp. (NYSE: EMC)          $16.50     $79.06   -79.13%      $209.00
AOL Time Warner (NYSE: AOL)     26.40      54.59   -51.64        483.61
Palm Inc. (Nasdaq: PALM)         3.75      27.19   -86.21        137.92
Genentech (NYSE: DNA)           48.25      61.13   -21.07        789.20

Portfolio Average                                  -59.50
Current Value of $4,000                                       $1,619.83
  Investment

* AS OF JAN 30, 2002

SOURCE: YAHOO! FINANCE.COM