Portfolio course correction: after being downsized, Winifred James has adjusted her investment style to safeguard her retirement.

When Winnie James emigrated from the caribean to the United States to join her family in 1964, she was determined to maximize her potential and taste success in her new country. Her family was living in Crown Heights, a largely Caribbean and Jewish enclave in the heart of Brooklyn, New York. There, she completed high school, earned a certificate in international banking from The American Institute of Banking, and earned a bachelor's degree in business management and finance from Brooklyn College in 1988. While pursuing her education, she was working full time at a Manufacturer's Hanover Bank in the international client services department, supervising 35 people.

James recalls, "In those days, companies had profit sharing, not 401(k)s, so I invested in the company's stock but diversified into government bonds, Also, the company had a brokerage arm which encouraged investing, so I participated in that as well."

As a novice investor, James was off to a good start. In the mid-'80s, Monte Henry, a 16-year veteran financial consultant at Smith Barney, contacted her about embracing a more structured investment style. After conducting a financial analysis, he began to oversee James' portfolio, eventually guiding her to huge returns, even in the face of the recent bear market.

When they began, James had $8,000 in her portfolio, which was 100% equity investments, although it was diversified across sectors. At the time, Henry says James was ah aggressive investor: "She was determined to invest strictly in stocks." Shortly after wards, she opened ah IBA and contributed the maximum $2,000.

Between 1988-1998, James' portfolio consisted of value-oriented stocks such as Berkshire Hathaway (NYSE: BIIICA), Biovail Corp. (NYSE: BVF), Cisco Systems (Nasdaq: CSCO), Microso ft (Nasdaq: MSFT), and Intel (Nasdaq: INTC). These stocks benefited from the bull marker, of the 1990s, earning as much as six times the amount of her initial investment. That type of stock growth came in handy because, in 1992, James was downsized from the bank. She left with $92,000, which she rolled over from her profit sharing plan, a few shares of stock, and a severance package that amounted to $42,000 after taxes.

'After the lay-off, I felt liberated, and I just started traveling." James says, thinking back fondly. "Between 1992 and 1998, I traveled to Jerusalem, Poland, Paris, Hungary, Mexico, Germany, Russia, and Egypt. I was enjoying life."

Soon things would change. "In 2001,James called me and said she felt uncomfortable with the market and decided she wanted to reduce her risk and reallocate:' Henry explains. James liquidated close to 90% other portfolio and agreed to an asset allocation model of 64% preferred stocks, such as IBM (NYSE: IBM), Ford (NYSE: F), and Bellsouth (NYSE: BLS); 10% bonds, such as Deutsche Telecom; 10% cash; and the remainder in income-oriented equity and equity mutual funds. This strategy enabled James to lock in yields of 6.30%-7.50% on the preferred stocks and some of the bonds. The Deutsche Telecom bond's coupon is 8.25% and its yield to maturity is 6.50%. James also owns a house and two lots of land in the Caribbean.

Nowadays, James keeps close tabs on her portfolio, which, at slightly over hall a million dollars, has gained a tidy profit on her initial investment. And with that large a portfolio, estate planning has become paramount.

"My adviser discussed estate planning with me and I have the paperwork to fill out," she says. With her adviser's help, James has stayed a step ahead of the market and emphasizes the value of making sound investment decisions to friends and family.