Q. What is the outlook for my investment in Liz Claiborne Inc.? — P.V., via the Internet

A. Sales of this famous women's clothing maker have picked up and management says it has become "less melancholy" about the upcoming holiday season. Its inventory is also much lower than a year ago.

Nonetheless, the economy continued to take its toll as it lost $90.5 million in its third quarter. That's why it initiated changes to better control the sale and pricing of its merchandise.

It is pulling its main Liz Claiborne brands out of numerous department stores so they can be solid exclusively at JC Penney Co. in fall 2010. It will still design the brands, but they will be produced by JC Penney suppliers.

In addition, its Liz Claiborne New York brand designed by Isaac Mizrahi will be sold by the QVC television shopping channel. These shifts will not affect its Juicy Couture, Lucky Brand, Kate Spade and overseas Mexx brands and their stand-alone stores.

Spurred by those moves, shares of Liz Claiborne (LIZ) are up 99 percent this year following declines of 86 percent last year and 53 percent in 2007.

The company hired turnaround firm Alvarez & Marsal in September to review its operations for ways to improve cash flow in the U.S. and Europe, stressing that this does not indicate an initial step toward bankruptcy.

Consensus rating on Liz Claiborne stock is currently "hold," according to Thomson Reuters, consisting of one "buy," five "holds" and one "underperform."

William McComb, who became CEO in 2006, spent 14 years at Johnson & Johnson, where he earned a reputation for enhancing brand names. He has been cutting costs by outsourcing some corporate functions, consolidating distribution centers and closing some stores.

He must improve the company's financial health to properly handle its heavy debt burden. Earlier this year Standard & Poor's Ratings Service lowered its rating on the company two levels to B, from BB-, and said the outlook was negative through year-end.

Earnings are expected to decline 241 percent this year, compared with a 1 percent decline for the textile-apparel clothing industry, according to Thomson Reuters. Next year's projected 101 percent gain compares with the forecast of a 13 percent rise for its peers. The five-year annualised growth rate is expected to be 14 percent versus the forecast of an 11 percent increase industry-wide.

Q. Is Waddell & Reed Asset Strategy Fund a good investment? — K.C., via the Internet

A. It does its own thing: Management has the flexibility to invest in virtually any asset class, ranging from stocks to bonds to commodities and exchange-traded derivatives.

It sometimes shifts dramatically between asset classes, which, while traditionally considered a risky strategy, has worked well for this fund for more than a decade.

The $3.2 billion Waddell & Reed Asset Strategy "A" (UNASX) is up 27 percent over the past 12 months to rank in the upper one-third of world allocation funds. Its three-year annualized return of 11 percent places it in the top percentile of its peers.

"We recommend this fund, though if either or both of the managers who run it were to leave, we would reconsider," said Michael Herbst, analyst with Morningstar Inc. in Chicago. "The key aspect of this fund is our confidence in its management."

Respected portfolio manager Michael Avery, with more than 30 years of investment experience, has been with the fund since 1997. Ryan Caldwell joined the management team in 2007. They use a top-down, theme-oriented approach to investing while drawing upon the firm's team of more than 70 analysts, portfolio managers and economists.

Global equities and debt, foreign currencies, precious metals, cash and short selling are all put to use at various times. Since this is a world fund, it can include U.S. stocks.

"The key point for investors is that they should expect its shifts between asset classes or into and out of cash," cautioned Herbst. "They must understand that's simply a part of the territory."

One-third of the fund's stocks are in financial services, with other significant concentrations in energy and industrial materials. Among its largest country investments, one-fourth of assets are in the U.S., followed by 19 percent in China and 5 percent each in India, Taiwan and the United Kingdom.

Top holdings have included gold bullion, Industrial and Commercial Bank of China, Taiwan Semiconductor Manufacturing, China Life Insurance Co., Monsanto, Qualcomm, the United Kingdom's Standard Chartered Plc., China Shenhua Energy Company Ltd., France's Total SA and Visa.

This 5.75 percent "load" (sales charge) fund requires a $500 minimum initial investment and has a 1.20 percent expense ratio.