If Housing Slumps, How Safe Are You?

You may be more exposed than you think, especially if you own financial-services and consumer stocks.

Better take a close look at your bond funds, tooIf you take comfort thinking that your well-diversified investment portfolio is bound to fare well even if housing values decline significantly, think again. True, that rationale has panned out before. For example, someone who sold a house in the Northeast in 1991 and put the proceeds into the stock market would have missed a decline in real estate values and enjoyed stock market gains for the rest of the decade.