Investors are in for a wild ride over the next few months with international stock markets expected to keep bouncing around, local analysts are predicting.

Those who were smart have already taken their profits and run before the markets began plunging.

For others it has been perhaps a costly learning experience depending on how much their portfolios were exposed to the meltdown in the Asia-Pacific markets, or to companies affected by the turmoil there. The ripple effect from weakened Asian stocks and currency to European bourses, and to a lesser extent the US, demonstrates the links between the stock markets and global trading companies.

Patrick Dell, head of the international equity investment section at the Bank of Bermuda Ltd., says the increased volatility in the international markets is a sharp reminder of the risks of investing. Investors tend to become complacent after a long bout of good times.

"A lot of investors get carried away,'' he said. "They like the returns and they kind of ignore the risk. One doesn't come with the other.'' The bank's strategy has been to go for a less risky options when picking where it wants to invest rather than go for the possibility of higher returns in other markets. In the Pacific Rim, the bank's international equity fund only holds investments in Australia, Hong Kong, Singapore, and Malaysia.

"It's a decision you have to make,'' he said. "Do you go for above average risk and above average returns or do you go for a less risky strategy?...Our international portfolio has about 82 percent in the US and Europe and both Japan and Pacific Rim account for 17 percent, which is still something. It is a lot less than some, but it is one of our lowest figures for a long time. We have four percent Pac-Rim exposure so we have avoided the worst of the turmoil. We're feeling fairly risk adverse at the moment.'' An investor should look at their weightings in bonds, equities and cash. Mr.

Dell recommends an above average position in cash. While it's too late to save a portfolio from Pacific Rim holdings it's also premature to attempt to snap up any cheap stocks affected by the downturn. But there are some bargain buys in Hong Kong, where the market has fallen from about 16,000 to close at 11,144.34 Friday. Some stocks have fallen 25 percent in a few weeks.

"I'm not saying this is the bottom,'' Mr. Dell said. "We may have shaky days, but I suspect the rump of the sell-off has already been done. It's probably premature to put money in unless you're a long term investor and have a reasonable amount to invest.

"Stick to the recognised markets of US and Europe. I don't think it's time to be brave. The investor should let things settle down before venturing forth. I think he ought to look at risk involvement in markets. Now is still the time to be cautious.'' Mr. Dell predicts the market volatility will continue in the short term.

"It's inevitable at these levels of the market that the volatility will continue,'' he said. "The great danger is being whipsawed by the market. Make your strategy. Decide where you want to be over what time period and then ride out the waves.

"Don't sell on big falls and don't buy on big rises...Try and be as dispassionate as possible and take a total look at where you want to be. We all get the temptation of panicking, and getting whipsawed around. But if you've got your strategy and do a little bit here and a little bit there, it tends to work out in the long term.'' Chris Hough, an investment advisor with GulfStream Financial Ltd., also advises punters to revisit their investment strategy but not to panic and run to the exit. October has historically been a soft month for markets and November has usually presented a buying opportunity.

"Don't let the short term overwhelm a well thought out strategy,'' he said.

"If an investor doesn't have a well thought out strategy they may be in trouble. They should ask themselves `Why have I invested in these products?' If they don't fit your strategy then you might want to lighten up on a position or take out portfolio insurance'.'' Mr. Hough said the easiest way to protect a portfolio from volatility is to hedge using index options, or by using individual security options depending on the risk tolerance of the individual.

"It's quite simple, although it sounds complicated,'' he said. "We are putting most of our clients into some sort of portfolio hedge so if the market does drop, we're going to make money on the hedge. We're going to take the hedge off and make a profit on the hedge and buy lower valued assets.'' He believes the benchmark Dow Jones Industrial Average could fall to about 7,300 in the near term, depending on whether the Federal Reserve policy-makers decide to change interest rates at their November 12 meeting. He doesn't believe the rates will change.

"I think over the next two to three business quarters you'll see the Dow back up above 8,500. You should go back and look at your initial strategy. Don't forget why you made an investment, because this is just a short term anomaly.'' Stock picking will be tough in a volatile market but the smart players can profit by sopping up the bargains.

"It's a buying opportunity all the way down,'' he said.

Jeffrey Brewer, managing director of Case International, said investors should expect some financial institutions to have taken some significant "billion dollar hits'' on the currency crisis and market drops in the Asian region.

"I think the headlines are going to be about who was on the wrong side of all that money that moved out of Asia,'' he said. "It's hard to tell. Maybe a French, British and a couple Japanese banks have taken hits. So if that's sitting in your investment portfolio, those are vulnerable.'' For US multinationals the exposure to the meltdown will be limited, he believes. Corporate earnings have already been affected in the third quarter by the strong US dollar.

"We're not too concerned,'' he said. "Earnings are fairly strong. Companies that would have reported 20 percent growth are reporting 15 percent. You have a five percent hit, and I assume we'll see that again in fourth quarter for companies with exposure to Asia.'' Case is a sub-advisor to the Bank of Butterfield's international equity fund.

The fund has about no exposure outside of Japan to Asian markets. Case decided to decrease its holdings to 11 percent in Japan in the second quarter.

"We believe it will take quite a while for the financial shock to work its way though the system,'' Mr. Brewer said. "It will impact some of the banks and insurance companies. There are plenty of other values around the world we can take a conservative approach with.'' BUSINESS BUC