Lower education

As unemployment figures rose the past three years, so too did the number of students seeking to raise their educational qualifications by enrolling in advanced degree programs.

But new figures reported by the Graduate Management Admission Council show demand for the traditional, two-year master's of business administration program is slumping.

More than three-quarters of programs responding to a recent GMAC survey reported a decline in applications last year. Forty-one percent reported that applications were down more than 20 percent. While Wharton and Harvard may never have to worry about filling classrooms, other schools that saw MBA programs as cash cows might.

For-profit education companies like Career Education Corp., DeVry, ITT Educational Services, and Apollo Group, which operates the University of Phoenix, have already seen their stock values drop based on disappointing enrollment figures, regulatory concerns, and legal inquiries. "They've had very high valuations going into 2004," said Alexander Paris Jr. of Barrington Research in Chicago. "As they say, the bigger they are, the harder they fall."

With the economy improving, however, GMAC's Daphne Atkinson says student interest in MBAs may also be returning to historical norms.

Emotional drain

Every week seems to bring new reports of economists showing surprise at the latest economic data. One week the Commerce Department may release information about lower-than-expected growth, followed by a Labor Department report showing lower-than-expected unemployment filings. At the same time, corporate earnings miss the mark set by industry analysts.

Each announcement has an immediate impact on Wall Street. And filtering through these conflicting reports can leave the head of an individual investor spinning.

Recent studies suggest that many investors rely too heavily on the latest news, leading to irrational investment decisions. "That is true in terms of unfavorable, unsettling negative events, but it's also true for positive events," said Hersh Shefrin, a finance professor at Santa Clara University.

Experts say people tend to project recent patterns into the future, meaning investors will buy stocks and mutual funds that performed well last year but may be unwise investments now.

So what's an investor to do?

Create a long-term financial plan and stick with it. Rebalance your portfolio to become adequately diversified. And consider consulting with a trusted financial adviser who is a bit more emotionally detached from the situation than you are.

Balance Sheet