(MONEY Magazine) – MONEY FLASH

Going for real gold: Korea' s amazing investment prospects by Diane Harris Booming exports and an explosive economy make South Korea one of the best places in the world to invest. Although the stock market is not yet open to foreigners, you can acquire shares indirectly. Here' s how, why and what to buy. Page 60

SPECIAL REPORT: DIVERSIFICATION

The proven way to cut your risk and protect your profits by Augustin Hedberg In today' s turbulent econosystem, where the air fairly crackles with risk, investors are seeking refuge. The best strategy of all is an old one: diversification, often promoted under the trendy new name of asset allocation. It can reduce your risk while protecting -- or even increasing -- your return. Page 62 -- Box: The five faces of risk. Page 62 -- Q& A: Investment adviser Larry Biehl. Page 66

How vulnerable are you? by Clint Willis Your financial future may not be as secure as you imagine. True security begins with an unsentimental journey into your finances and an analysis of your degree of diversification. Page 75 -- Worksheet: Assessing your portfolio. Page 76 -- Box: Six mistakes investors make. Page 78

Choosing tactics in the war against investment risk by Jeanne L. Reid

To diversify effectively, you must find a method that makes you feel comfortable. Here are four to choose from. Page 83

A lifetime plan to keep risk at bay by Leslie N. Vreeland Economic changes are only one of the reasons to alter your asset mix. You will also need to make continuing adjustments as your personal and job circumstances change. Page 90

FEATURES

Social Security explained by Robin Micheli Smart retirement planning demands that you understand how the Social Security system works. So read these 23 common questions and answers to learn the basics about the program that touches every family. Page 107

One Family' s Finances: An inner- city Mr. Chips by Suzanne Seixas Dedicated Bronx schoolteacher Fred Plotnick believes that every child should get the chance to go to college. But how will he afford to send his own kids? Page 113

How to cope when home prices turn soft by Marguerite T. Smith They' re weakening -- even falling in some places. Here' s how to size up your area and know what to do. Page 123 -- Box: How strong and weak markets compare. Page 124

The lasting temptation of buying collectible cars by Holly Wheelwright Muscle cars and other recent used- car- lot refugees have sizzled since October' s stock market crash. But don' t fall head over wheels. Page 131

Cruising for a bargain? Set sail ! by Robert McNatt The ships are new. The crowd is hipper. And the price is right -- if you look before you book. Page 142 -- Check It Out: Sailing business class. Page 144 -- Checklist: Five salty tips. Page 147

COVER ILLUSTRATION BY MIRKO ILIC Clockwise from top right: Ken Regan/ Camera 5, Richard McNeel, Michael Going, Rob Kinmonth, George Steinmetz, Phil Scheuer, Warren Isensee

DEPARTMENTS 4 Editor' s Notes The stock recommendations in MONEY 7 Wall Street Cleaning up with environmental stocks 19 Money Helps Answers to your questions 27 Money Update Saying no to binding broker arbitration; more summer work, less student aid; insurance that covers nursing care; commodity funds 35 Investor' s Scorecard Where to save, borrow and invest 45 Fund Watch Updating the Dreyfus Strategics; reforming 12b- 1 fees; the top- yielding money funds 151 Investing Basics A guide to zero- coupon bonds 157 Family Finance Records worth keeping 160 Retirement A worksheet for figuring your post- work cost of living 162 Index The most useful articles of the past 12 months 167 Starting Out Advice on changing careers in mid- life 175 Money Profile Investment advice from a pro who handles money for CEOs 179 Your Taxes The outlook for a 1988 tax law; goofs in IRS letters; a tip for investors 180 September Checklist What you should do this month