First, let me say that I am not an investment consultant, and this article was not ghostwritten by a stockbroker or investment advisor. However, it does represent the opinions of an individual investor who may perhaps spend more time looking at financial news, economic indicators and global trends than most folks do. You too may be an avid and experienced investor, and this is not intended to override your own good judgment or the advice of your investment counselors. However, if there is something here of value for you, then take advantage of it. The objective is simply to encourage you to look for opportunities where you might not have looked before.

Whither the economy? Inflation is miniscule, in spite of Fed worries to the contrary. Industrial productivity is at a 7-year high. Jobless rates are the lowest in 30 years, wage increases last year were about 3.7%, and unemployment claims were essentially unchanged nationally and down in California. The stock market, if the current correction is reasonable in depth (and you’ll know that by the time you read this) holds the title of the longest bull market in recorded history.

The American century, as newscasters are fond of calling it, has ended with the high probability that technology will successfully carry us well into the next century. And all around us in this country are countless new ideas, new products, and new ways to improve our productivity, our profitability, and the quality of our lives. People will be drawn to these new ideas precisely because they promise new and better ways to live. And where people are drawn, corporate profits will follow. And that, in the final analysis, is what makes a stock market winner.

I believe that technology and the people who create it are the foundation of America’s global economic advantage. Further, I believe they will continue to provide that advantage for the foreseeable future. I further believe that the investment policy of individual investors who are ultimately responsible for their own financial future, should recognize that reality and make investment decisions based on it.

That means for most of us discarding, or at least modifying significantly, the old investment model of diversification that says you always divide your investments between stocks, bonds, real estate, gold, cash or whatever. That model seems to assume you make investments and then largely wait them out. A traditionally "balanced portfolio" keeps your losses down by keeping your yields down.

So you make investment decisions that are lower performing most of the time so you don’t have to worry about them at other times. Of course, if your investment policy is simply to protect what you’ve already got, that may be the right course of action to follow. However, if you intend to seriously grow the value of your investments, I believe such a policy can be a costly mistake. The market goes up, the market goes down, sometimes a lot. But on balance and over the long term, the market goes up more than it goes down.

So then, here is my suggestion for a long-term investment model for a business professional with reasonable risk tolerance, and who is in their prime earning years:

1. Your home should be your primary, perhaps your only, real estate investment.

2. Invest 50% of what is left in well selected technology-based stocks or no-load mutual funds. The selection process is key here.

3. Invest 40-45% in other good equities, either stocks or no-load mutual funds. Again, selection is key, and balance within this segment is important.

4. Retain 5-10% of your investment assets in cash or short-term investments to enable you to take advantage of opportunities.

5. Devote at least a half hour each day to reading about your investments, being aware of new possibilities, and improving your investing skills.

That isn’t the shortsighted view of a youngster who can only remember the glory years of the current bull market. You may recall an item from our January 1999 issue in which Peter Lynch of Fidelity Magellan fame reminded us that equity investing has consistently out-earned (by a substantial margin) all other investment options over nearly all of the past 40 years.

The numbers tell the story. The question for you to ask yourself is: At the end of the day, how do you want your story to be told?