Smart Money: Investors need tough stomach to ride stock-market roller coaster

Bruce Williams is a national radio talk show host and syndicated columnist.

Dear Bruce: I put $100 each month into my IRA, but the contributions don't keep up with the fund's ongoing loss. I opened a tax shelter three years ago. Perhaps I'd be better off stopping my contributions, keeping the cash and taking the tax hit. I've recently been laid off, so I won't need as much tax help. John, Elmira, N.Y.

Dear John: You are a member of a large fraternity where your contributions do not offset the losses. Each time your funds decrease in value, however, you are buying proportionately more shares. Over the long haul, most agree that you will come out ahead.

The fact that you are laid off and not needing as much tax help is another variable. Taking advantage of the rules of an IRA primarily for immediate tax relief seldom makes sense. It is the long-term savings that ultimately make all of this worthwhile. Right now, it is difficult for many of us, but over the long haul, I think you will be thankful that you continued with your regular savings.

Dear Bruce: The quarterly reports are in. My IRA has lost $22,000 this year. I'm 60, but I don't need to begin withdrawing and won't be required to do so for more than 10 years. Given this free fall, should I withdraw, close it down, wait it out, transfer? N.H., Topeka, Kan.

Dear N.H.: If I had that kind of a crystal ball, I would be a multizillionaire. Once again, time seems to be on your side. If you've stayed this long and you don't need to make withdrawals, you have probably taken the biggest hit; to jump out now would not be the smartest thing to do.

That said, if the market sinks even lower, you would look very smart pulling your dough. It's a question of where you think it's going to be in two, three or five years. Do you think the market will continue to lose ground or do you feel that the bottom is somewhere near? That is a personal judgment that each of us has to make. Hopefully, we make the right one.

Dear Bruce: I took a job as a security guard. One of the conditions of employment was that I had to provide my own clothing, according to their specifications. To be fair, you could wear these clothes as street clothes. Is it possible for an employer to tell an employee how to dress? If so, shouldn't the employer pay for it? M.M., Bay City, Mich.

Dear M.M.: There are many occupations where a type of uniform is required. Consider people who work in hospitals. The green and white smocks and jackets they wear are part of the uniform. In most cases, but not all, the employee pays for them.

Sometimes wait staffs in restaurants are required to wear specific clothing. As an example, a female might be required to wear a dark-blue skirt or a male a certain type of khaki pants. Again, sometimes the employer pays for this, but very often it is a condition of employment.

Dear Bruce: I need a good lawyer on estate matters to execute my will. I own some property, and I would like to get the matter taken care of. How do I go about finding such an attorney? C.W., Saginaw, Mich.

Dear C.W.: Checking with friends and neighbors is one of the best ways to get a reference for an attorney. If that isn't possible, call your county bar association, explain your needs and they will give you the names of a half-dozen attorneys whom you can call and discuss the matter and, hopefully, feel comfortable with.

Dear Bruce: I know that you suggest hiring an attorney when you are going to build a new home. My daughter is building, and I told her she should consider this, and told her you were my source. She said that that applies only to the East Coast and not California, because everything is addressed in escrow. Will you please reply with the reasons to have an attorney and if this East Coast-West Coast thing is true? M.T., California

Dear M.T.: This "East Coast thing" is nonsense. An escrow company does not represent your daughter. It is prohibited from doing so by law. True, it can handle many details, but when you are going into a proposition as complex as buying or building a new home, and you do so without proper representation, you do so at your peril.

The relatively small amount of money spent on competent counsel may turn into one of the best investments your daughter will ever make. It is true that an attorney may uncover things that slow the deal down or perhaps kill it, but that is better than getting up to your eyeballs in problems and having to spend a fortune to get extricated.