Volatility. Love it or leave it.

If you can't accept gyrations in the value of your investments, get out of the stock market. Glancing blows to the portfolio are now common and undoubtedly will remain so.Despite fine performances overall this year, both stocks and stock mutual funds can be hammered suddenly.

Even though they have diversified holdings, funds such as Loomis-Sayles Capital Development Fund and Fidelity Value Fund suffered declines of nearly 10 percent during the week that culminated in the 190-point plummet of the Dow Jones industrial average.

The biggest funds holding the most investor money and the most stocks, the successful Fidelity Magellan Fund and Vanguard Windsor Fund, were pummeled with declines of around 6 percent.

As funds holding potential buyout stocks took a bath, long-term bond funds such as the Benham Target funds performed best by turning in gains of around 3 percent, according to the Mutual Fund Values investment advisory.

Investment professionals have been considerably more cavalier about sudden corrections than most average investors are. But, of course, it's their business, and they must adapt to this new game.

"Volatility is now a fact of life because of information being disseminated so quickly, all the derivative products (such as stock index futures) and also the institutionalized market," said Steve Einhorn, chief portfolio strategist with Goldman Sachs & Co. "So long as fundamentals remain the same, despite volatility, we've been increasing our market exposure on price weakness."

Einhorn's model portfolio is now 65 percent stocks (up 5 percent from several weeks ago), 30 percent shorter-term bonds and 5 percent cash.

"The market volatility is like the weather because you can't change it and must therefore simply learn to deal with it," said Gary Brinson, president of Brinson Partners, a Chicago-based investment firm which manages more than $12 billion.

"I'm reasonably nervous about this market because of the bubble of debt and the corporate earnings problems, which differs considerably from late 1987 when I was buying because I considered the crash to have been constructive."

Brinson's model portfolio reflects his caution, with 45 percent to 50 percent in stocks (versus 65 percent a few weeks ago), 45 percent bonds (up from 30 percent), and the rest in short-term money-market instruments.

On a short-term basis, Einhorn suggests what he calls "bullet proof" stock choices such as Philip Morris Cos., Kimberley-Clark, Kellogg Co. and Compaq Computer. Near-term opportunities gradually will broaden to include companies such as Inland Steel, Aluminum Co. of America and Reynolds Metals.

He's also high on thrift-related agencies such as Fannie Mae, Ginnie Mae and Great Western Financial, and energy stocks like Royal Dutch Petroleum and Kerr-McGee.

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"The bull market remains intact and I'm convinced stocks can still turn in a 15 percent total return over the next 12 months," Einhorn said. "I don't think a replay of October 1987 is possible now, since things are totally different today as far as stock prices, dividends, the economy, inflation and the dollar."

Brinson, describing his current portfolio choices as "on the cautious side," recommends stock in American Express, Bristol-Myers Squibb, American Home Products, Central & South West, Coca-Cola Enterprises, Detroit Edison, Emerson Electric, Marsh & McLennan and United Telecom.

"These stocks represent a tilt toward companies that aren't in manufacturing, with a preference toward service-oriented firms," explained Brinson. "Income-oriented investments also look good to me now."

Human nature is interesting, particularly when it comes to numbers. Just as investors once learned to shrug off 40-point movements in the Dow Jones industrial average, some now even consider 100-point moves as less than stunning.

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