There is hope for those in the stock market. The worst might already have occurred. Unless you have already sold, in which case you may have tax deductions, your losses may be on paper only.

Even if you have sold, maybe at a loss, you at least have begun to put it behind you. Opportunity lies ahead. Historically, the market has always recovered.In fact, the deep recent losses have made the market just a bit

more understandable, dropping prices from their dreamy heights to a reality that can be understood and analyzed.

More understandable, for example, in terms of price-earnings ratios, the number of times earnings at which shares are priced. Long-term ratios have averaged under 15, not double that as they had been.

Or in terms of expectations. Based on decades of records, investors should be grateful to attain an average annual gain - appreciation and dividends - of 11 percent or 12 percent, not 30 percent or more, as they had come to ex-pect.

Experienced investors now assume that momentum alone could carry prices substantially lower in the next several weeks, but a study of past market breaks suggests much of the decline might already have occurred.

Sharp bounces might still occur, but the suggestion is strong that investors who earlier bought on short-term dips are now more inclined to sell on any gains.

Robert Morrow, a Bradenton, Fla., adviser to institutions who forecast (in print) this and earlier market plunges, foresees a total decline of nearly 26 percent for the Dow Jones industrial average and 40 percent for the NASDAQ composite index. If Morrow is correct, it means more painful declines before a bottom in early October.

It will leave lessons.

The primary lesson is for investors to do their homework and rely on their own thinking. Literally millions of relatively new investors have totally ceded decisionmaking to mutual funds and investment advisers.

These are the so-called experts, but as mountains of evidence show, there are few experts in the marketplace. Remember, these are the people who told you to invest in the fast-growing economies of Asia.

Stock market advice is cheap these days, often biased at the source. Gurus are celebrities, extolled in the media for their self-proclaimed genius, but their customers often have leaky rowboats, not yachts.

Mark Hulbert of The Hulbert Financial Digest, a career examiner of market advice, comments that lately "the level of hyperbole, exaggeration and outright lying strains even my already cynical perspective."

An old adage - an investor is his or her own best fiduciary - is thus likely to be resurrected. The moral: Accept advice, but don't forsake responsibility. Differentiate between quality information and that of pitchmen. Listen and learn, but make your own decisions.

Can it be done? Never more so than today, when vast amounts of information are available at public libraries, on the Internet and in specialty publications such "Better Investing," to name one of many.

"Better Investing" is published by the National Association of Investors Corp., to which most of the nation's amateur investment clubs belong. Year after year the best clubs outperform the professionals.

A basic precept of club philosophy is that the American economy might dip from time to times, and sound investments might also, but that over the long run the economy will grow and so also will good investments.

At the moment that prospect seems bleak. Much of Asia is in recession. Japanese leaders seem frozen. Russia is in deep political and economic trouble. The United States, economically strong, is politically damaged.

How will recovery develop? When investors regain a measure of confidence and recognize the existence of perhaps modest but real values, which undoubtedly will evolve, if they haven't already.

In the meantime, investors seeking light on the horizon might keep in mind that billions of dollars still pour into 401 retirement plans, and that the money must find its way into investments. Where else?

And, as Standard & Poor's points out, the United States, still the safest economy, may be seen as providing a global "safe haven" for domestic and foreign funds seeking security.



Stocks slide early on

Stocks extended their losses in skittish trading this morning, with the Dow industrials quickly sinking 150 points before recovering some of the lost ground.

The selloff came as shares tumbled in Europe and followed a mixed day in Asian markets.

The Dow Jones industrial average was down as much as 150.87 in the opening minutes of trading. Although it bounced back slightly, the average of 30 big companies remained off 94.74 at 7,687.63 in early afternoon, adding to Wednesday's late 45-point retreat.