Refinance your mortgage. With mortgage interest rates at such low levels, you should review refinancing options if you haven't already done so. Even if current interest rates are only half a percent lower than your mortgage, it may make financial sense to refinance. Those with adjustable-rate mortgages may want to switch to a fixed rate, which may reduce the current payment while locking in an attractive rate.
	Opt for a 15-year mortgage instead of a 30-year mortgage. Although the monthly payment will be higher, you pay your mortgage off 15 years sooner, saving a significant amount of interest.
	Increase your mortgage payment. Many lenders will allow you to pay as much additional principals as you'd like, so you can make additional payments at varying amounts when you're able.
	Pay your mortgage every two weeks. First check with your lender to make sure this option is offered. By paying half your monthly mortgage payment every two weeks, you end up making 13 monthly installments in a year.

Your net worth equals your assets less your liabilities. Most people concentrate on increasing assets, but decreasing debt, especially debt with high interest rates, is also an effective strategy to help you increase your net worth. Please call 1-800-878-4036 if you'd like help reducing your debt.

TRADING STOCKS

STOCK EXCHANGES

Only securities specifically listed on an exchange can trade on that exchange. Stock exchanges conduct trades in a specific physical location. Prices are set through auction markets, with stocks sold to the highest bidder and bought at the lowest offer. When an order to buy or sell is placed with a broker, those instructions are transmitted electronically to the exchange floor. A floor broker for that firm receives the order and takes it to the trading post where the stock trades. Brokers representing buyers and sellers of that stock are gathered around the specialist. After checking out prevailing prices, the floor broker executes the order with the specialist or another floor broker at the best possible price. The specialist typically buys and sells shares when there are no other buyers or sellers. When the transaction is completed, the price is reported on the ticker. Confirmation and details of the trade are sent by computer to the brokerage firm, which notifies the investor.

To have its shares trade on an exchange, a company must meet the exchange's listing requirements, which vary by exchange. The requirements generally set limits for the following items:

• before-tax earnings
• number of publicly held shares
• number of shareholders
• the stock's trading volume
• security price

There are two national stock exchanges and several regional exchanges. Perhaps the best known stock exchange is the New York Stock Exchange (NYSE), which lists over 3,100 companies (Source: NYSE, 1998). The American Stock Exchange (AMEX) lists over 700 companies (Source: AMEX, 1998). Listing requirements for the AMEX are less stringent than those for the NYSE, thus attracting smaller firms. Regional exchanges include the Chicago Stock Exchange, the Pacific Stock Exchange in Los Angeles, the Philadelphia Stock Exchange, the Cincinnati Stock Exchange, and the Boston Stock Exchange. These exchanges were originally organized to trade local interest stocks, but now also trade some stocks listed on the NYSE and AMEX.

THE NASDAQ STOCK MARKET

The NASDAQ Stock Market does not conduct trades in a specific physical location but is a computer-based trading system. Approximately 5,400 companies are listed on this market (Source: NASDAQ Stock Market, 1998). Buyers and sellers set prices through a negotiated market. Orders are sent to the trading desk within the brokerage firm, where the trader shops among that stock's market makers for the highest bid price for sell orders or the lowest ask price for buy orders. Market makers are firms that buy and sell a stock out of their own inventories. Firms can execute trades from their own inventory as long as the stock is not offered at a better price by another market maker.

Stocks traded on the NASDAQ Stock Market are divided into two groups: national market issues and small cap issues. The criteria to be listed in the small-cap issues are significantly less stringent than those for the national market issues.

As of October 30, 1998, the National Association of Securities Dealers (NASD) and the AMEX officially joined forces, bringing the NASDAQ Stock Market and the AMEX together under one corporate identity. However, the two markets will continue to operate independently.

THE OVER-THE-COUNTER MARKET

Several thousand stocks trade in the over-the-counter market. Prices are published daily on "pink sheets" by the National Quotations Bureau. The pink sheets list the company's name, the last reported price, and the name of the brokerage firm that makes a market in the stock. The market maker must be contacted to obtain current price information, as well as the execute orders.

WHY SPLIT A STOCK?

A stock split simply increases the number of outstanding shares, while decreasing earnings per share and stock price per share. For instance, in a two-for-one split, each shareholder receives an additional share of stock for each share owned. The stock price after the split equals half the price before the split. So, an investor with 100 shares of stock with a price of $100 per share would own 200 shares with a price of $50 per share after a two-for-one split. The total value of the investor's holdings remains the same before and after the split. Two-for-one splits are the most common, but a company can use any combination. Companies typically split their stock when the share price reaches a high level because they believe that investors prefer lower share prices. They feel that lowering the share price will benefit stockholders by making the stock appealing to a broader range of investors.

A company can also declare a reverse stock split to increase the price of its stock. In a reverse stock split, the company exchanges more shares of stock for fewer shares. For instance, in a five-for-one reverse split, five shares could be replaced by one share. Companies may want to increase their stock prices to discourage small investors who are costly to service or to attract institutional investors who won't purchase stocks below a certain price level.

YOUR INVESTMENT PORTFOLIO DURING RETIREMENT

How you allocate your investments impacts the ultimate size of your nest egg and thus how much you can withdraw annually. Some pointers to consider when you review your asset allocation include:

	REVIEW YOUR OVERALL ALLOCATION FOR ALL YOUR RETIREMENT ASSETS. It is not uncommon for a retiree to have a couple of 401(k) plans, some individual retirement accounts (IRAs), and personal savings designated for retirement. You should assess your allocation on an overall basis.
	EVEN AFTER RETIREMENT, YOU HAVE A LONG TIME FRAME FOR INVESTING. The conventional advice used to be that your investment portfolio should gradually shift from a concentration in stocks for capital appreciation to a concentration in fixed-income investments by the time you retire. But with many retirements now stretching 25 years or more, a concentration in fixed-income securities may not provide adequate protection against the effects of inflation over that time period.
	YOU CAN SELL ASSETS TO MEET INCOME NEEDS. Retirees tend to allocate too much to fixed-income securities because they want their interest and dividend income to equal the amount they withdraw each year. That way, they don't have to touch their principal. Instead, focus on your overall portfolio performance. You can sell investments occasionally to cover shortfalls in income

• VIEW YOUR SOCIAL SECURITY AND PENSION PLAN BENEFITS AS FORMS OF FIXED-INCOME SECURITIES SINCE THEY PROVIDE ANNUAL INCOME. Thus, you may want to allocate a larger percentage of your portfolio to stocks.
• DON'T CONSIDER YOUR HOME AS AN INVESTMENT, UNLESS YOU PLAN TO SELL IT. Although your home may comprise a substantial portion of your net worth, it won't provide income for retirement unless you are willing to sell it.
• REVIEW YOUR PORTFOLIO AT LEAST ANNUALLY SO YOU CAN MAKE GRADUAL CHANGES IF NEEDED. You may need to adjust your allocation or adjust the amount you are withdrawing annually. Also, as you grow older, your portfolio allocation may change.