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Manny Schiffres of 'Kiplinger's Personal Finance' Discusses Intel and Personal Investments

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DARYN KAGAN, CNN ANCHOR: Now a closer look at what all of this means for your IRA, your 401(k), your other investments. For that, we're joined by Manny Schiffres. He's a senior associate editor at "Kiplinger's Personal Finance" magazine.

Manny, good morning, thanks for joining us.

MANNY SCHIFFRES, "KIPLINGER'S PERSONAL FINANCE": Thank you, Daryn.

KAGAN: OK, explain to me why I should care what happens to chip sales in Europe, in terms of my 401(k).

SCHIFFRES: Well, you hit the nail on the head earlier. Intel is widely held. You mentioned the figure, 25 percent of mutual funds hold Intel. It is a bellwether stock. If Intel is having problems, it's probable that there are other sectors of the high-tech arena that are having problems.

And it's, it's not just Intel. You've had the cellular service companies reporting problems. Sprint PCS announced a disappointment the other day. You had the cellular equipment manufacturers, like Nokia, announce -- preannounce an earnings disappointment. Now there is concern that telecom equipment suppliers may be coming under pressure because of telecommunications service companies, which have been experiencing heavy competition, possibly decreasing their purchases of equipment. So, there is a lot of concern that it's not just limited to the semiconductor industry but a problem throughout the high technology arena.

KAGAN: And is it also possible for the reach of mutual funds that I might or might not own that I might actually own Intel and not realize it?

SCHIFFRES: Well, if you own a fund that calls itself a growth fund and it invests in large company stocks, the chances are better than 50/50, I'd say the chances are probably 80 percent that it owns Intel and it probably owns Cisco and EMC and Nortel and possibly Microsoft and Lucent.

So, I think what's really important is that investors look at their overall portfolio and try to get a handle of how much they have in technology stocks. Technology represents roughly a third of the S&P 500 index. If you own a lot more than that, you probably have more technology than you want to have.

KAGAN: So, what do you do? What do you do on a day like today?

We're watching the Nasdaq is down 139, the Dow is down 107, probably not the best idea to panic.

SCHIFFRES: Well, you definitely never want to panic when it comes to investing. If you own Intel in a regular account, I think you have to look at the tax situation. If you have a huge profit in it, which I think a lot of investors do have, you may not want to sell it. I don't think I would want to buy it now. There's a theory on Wall Street called the cockroach theory that says that one earnings disappointment is usually followed by several more. And it may be a while before Intel stock resumes its ascent.

KAGAN: Lovely, we'll end this one with cockroaches.

Manny Schiffres, from "Kiplinger's," thank you very much...

SCHIFFRES: Thanks Daryn.

KAGAN: ... for joining us, appreciate it.

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