Before you drive into auto stocks...

By , Staff writer of The Christian Science Monitor

To get the smoothest possible ride out of your auto-linked investments in 1999, financial pros suggest the following tips:

1. If buying an auto-related mutual fund, look for a diversified fund, that is, a fund that carries a portfolio of both manufacturers and auto supply/tire companies.

2. For both funds and individual stocks, look for automakers with strong global sales that could take advantage of market upswings abroad, especially in Japan and Asia.

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3. "Trying to time the market almost never works," says Justin Craib-Cox, of Morningstar Inc. So, buy auto stocks or auto-related funds for the long haul, not just to take advantage of expected cyclical gains or possible mergers.

4. Ask yourself: "Do I really need a sector fund, such as a fund heavy with auto companies?" You can usually buy into most major automakers by investing in a S&P 500 index fund, or a total stock-market index fund.

5. Be wary if auto sales jump because of a sudden new rebate program. The rebates may be eroding company net profits.

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