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Embrace the Future, Document the Past

There are two pressing questions regarding the phenomenon unaffectionately known as Y2K:

bulletWhatís going to happen to your investments if your brokerage firmís or bankís computer systems are not Y2K compliant?
bulletWill there be a stock market crash. The proper response to both questions is "Who knows?"

If you fear that electronic proof of ownership of your investments is at risk, consider taking these simple steps to prove your ownership, if necessary:

1) Keep your own, hardcopy financial records.

In other words, gather your confirmation statements. If you no longer have your confirmation statements, or any evidence of the cost of your investments, note the date and approximate time you purchased your stocks, bonds and mutual funds. Make note of the number of shares purchased, and naturally, the funds purchased and the companies invested in.

The more gloom and doom question regarding Y2K is, "Will the stock market crash?" It wonít matter if you are a long-term investor (as long as the stock market recovers from the crash quickly). If you are a short-term investor, itís time to examine or re-examine your tolerance for market risk. Economists have said that the U.S. economy is strong, but if most investors only care about what other investors will do as we near the end of the year, and most investors think that most investors will sell their securities between now and the end of the year, watch out! Your timing of this occurrence will have to be accurate for you to minimize the losses.

On the other hand, the coming of a new year and new millennium often brings great joy and optimism. If most investors feel optimistic, and youíre bearish, you will miss opportunities to make the most of your money. No one knows what others will do, just be sure that you know what you want to do, and why. Some experts suggest taking some money out of your account, enough for a three-day or week-long spending cycle.

2) Call your brokerage firm and ask them about their compliance.

The financial services industry, represented by the Securities Industry Association (SIA) has participated in the testing of hundreds of securities firms. The SIA has also helped create contingency plans in the event there is a Y2K problem. The SIA has recommended, among other things, that all U.S. financial markets should close at the same time early in the afternoon of New Yearsí Eve.

So what do you do if you donít have a brokerage account, checking account or savings account? What if you keep your cash in a shoebox, under the mattress, or in the dog house? What if you have no money at all, anywhere? We hope that you will spend January, 2000 committing yourself to financial literacy, creating your financial success toolbox, and becoming technologically savvy.

Technology, with all its imperfections and untapped potential, is here to stay, and will become the way many, if not most things, are done. The telecommunications industry has made it possible for people of modest means to have access to information that was once the purview of the wealthy. For every African-American on the web, there are thousands who are not. Donít let fear of technology keep your family and friends in the dark about investing, and thus in the poor house. Letís make 2000 the year we revitalized our minds, and gear ourselves toward financial success, online or off.