To our readers:

INVESTING in the first year after the October 1987 stock market plunge has been tentative, at best, for most people. The erratic behavior of the Dow Jones industrial average reflects the caution people are still feeling after watching the Dow fall 508 points in one day. But for 1989, investment experts say, some people who have been sitting on their cash all year are starting to look for - and find - buying opportunities in the United States and abroad.

But care is still the watchword. Overseas, there are a number of opportunities, if you select your countries and companies carefully. Diversification, now called asset allocation, is even smarter than it was under its old name. And investment clubs, where small amounts of money turn into respectable gains and big lessons, are growing again.

This issue of PF looks at these trends as investors decide where to put their money in '89.