"How would you keep bears away, Cora?"

"I'd feed them, so they wouldn't eat me."

Granted, it's tough to feed bears when you can't see them. Just because you can't see them doesn't mean they don't exist. Can you hear them? They're stomping around in that patch of thorny accusations, and they're just beyond that mountain of stock slides.

If you're like me, you have very little food to feed a bunch of investment-hungry bears. I have other mouths to feed. But these beasts are bent on gnawing our profits to shreds. Never fear - I figure we can make it out of these woods alive.

All it takes is six steps of a creative problem solving process, and a lot of good chocolate. The six-step problem solving process is a great way to tackle a problem. The chocolate is a wonderful way to handle stress.

The first step in this problem solving process is defining the problem. I think the problem is fairly clear. At the beginning of August, the stock market was deep into an 850-day decline. This decline marked the longest market slide since the Second World War. Today, blue chips are battered and each index tries to keep sinking to new lows. The environment is rough, ladies. We need our boots, gloves, and a first-aid kit.

The next step is to analyze this problem. Will it get worse, or will it get better? There's no way to tell. All we have to gauge the future are history and statistics. That's scary. At the moment, I'm of the opinion that history can't repeat itself simply because the environment seems to change every day. Statistics are supposed to be reliable, but number reporting is often flavored by human need and greed.

The best thing to do at this point is trust our own instincts and intellect. If we can't feed the bears, we can at least distract them. We need to find alternatives to our investments, so they'll diversify, last longer and - hopefully - reproduce.

This brings us to the third step in the creative problem solving process. This part involves brainstorming, idea generation, and the beginning of a pro-creative process. I'll throw some ideas out on the table, and you can add your own to the pile:

1. Re-mortgage the house, while interest rates are low. In fact, they're lower than they've been in over thirty-some years. Check into prepayment plans, too. If we aren't penalized for early payments, we might save a bundle in interest payments. By the time we have that house paid off, perhaps the bears will be in another stratosphere.
   
   
2. Let's try digging ourselves out of credit card debt. While our portfolios are sitting at 0% profit margin or less, our credit cards could be eating a 20% interest hole in our wallets. That's no way to beat a path out of the woods. Once our cards are paid off, we could cut them all up except one for emergencies, and one for that gotta-have pair of tennis shoes for the kids and that box of chocolates.
   
   
3. Buy some bonds and keep some cash in a compound-interest savings account. If we have a few alternative interest-bearing accounts, we'll have a much-needed rest from our attention-grabbing scratched and bitten portfolios.
   
   
4. Make that car, fridge, stove, and any other large ticket item last a little longer. Don't rush out to buy merchandise that depreciates before it even leaves the store. Keep the frivolous fritters to a minimum, and let's be creative with what we already have. If we're going to splurge, let's get the best. Top-of-the-line always lasts longer and/or tastes better. Top-shelf chocolate is one example.
   
   
5. On the other hand, let's be brave and continue to invest in solid companies while they're dirt-cheap. Although I don't trust history and statistics at the moment, the stock market has always proven to be the best return on investment. Call me na?ve, but here's something in me that still believes this information.

We're now at the fourth step in the six-step problem solving process. This is where we select the best ideas and prepare ourselves to implement them. Shoot, I'm going to go for all of them. I'll have maximum diversity and the biggest bang for my limited bucks.

The next step, implementation of the best ideas, is easy. Choosing all of them is a lot of activity for one person, but this is a good thing - if I stay occupied, I won't have time for nightmares. I'd rather fall exhausted into bed than toss and turn, sleepless, with visions of bear claws slashing my investments to shreds.

The last step of the creative problem solving process is evaluation. This is where we step back and wait to see if our solutions work. Since it takes time to see realistic profit from any form of investment?well?it seems to me we didn't have a problem in the first place. No matter how hungry the bears get, we just need to remain diversified and patient.

"Tell me again how you would keep the bears away, Cora."

"WHAT bears, mom? Are you a few chips short of a computer, or what? Let's go do something."

I grabbed a tourniquet and a handful of chocolates as we headed out the door, just in case.

Until Next Week,
Linda Goin