see "Feeling Left Behind" section below

That's because with dot-com and high-tech shares soaring in 1999 to stupefying heights, investors have made one thing clear: They want in on the bull market party.

And to jostle their way to riches, many investors are chasing the market's hottest stocks and mutual funds, rather than settling for steady, but perhaps unspectacular, returns of more conservative and diversified investments.

Indeed, financial planners and investment advisers say asset allocation - the practice of reducing risk by holding diversified investments - is nearly impossible to preach in this booming economy that has produced triple-digit mutual fund returns and soaring Internet initial public offerings.

But as this past week's plunge on the Nasdaq shows, investors who become too swept up in the high-tech frenzy could wind up big losers if they abandon accepted investing strategies.

Reality Check

"There's a lot of exciting stuff going on out there, and people don't think there's such a thing as a bear market," said Elissa Buie, a certified financial planner in Falls Church, Va., and chairwoman of the Financial Planning Association. "It's tough to have made a bad investment in the past few years, so now everyone thinks they're geniuses. But they need a reality check."

Some believe rising U.S. interest rates could make 2000 a poor year for technology stocks, which only raises the importance of selecting diversified, and perhaps conservative, investments, planners say.

However, investors say they feel pressured to cash in, and they don't see themselves getting rich by following traditional notions of spreading their nest eggs among different baskets, especially when some sectors recently have performed like rotten eggs.

Even retirees, whose prime earnings years are behind them, are taking bigger risks.

"If the momentum is there, why not take advantage of it?" said George Lessis, a 78-year-old engineer in Dayton, Ohio, with considerable technology holdings.

Lessis said he's not adhering to accepted planning principles because he believes the world is in the midst of another industrial revolution, this time prompted by e-commerce. "I'm more aggressive in this market and the reason is, the game has changed as never before," he said.

Lessis said he previously relied on advice from a broker, who stressed having both long-term and short-term positions. But he now invests online, choosing his own investments.

"I'm semi retired, so this keeps me busy," he said. "I don't want to sit around and play gin."

Getting Aggressive

In October through December, investors sunk a total of $30.5 billion into aggressive growth and sector mutual funds, compared to a measly $882 million in more conservative growth-and-income funds, according to flow trackers TrimTabs.com, citing figures from the Investment Company Institute.

By comparison, between January and September 1999, investors directed an average $2.3 billion a month into aggressive growth and sector funds, and $3.9 billion in growth-and-income funds.

In general, growth-and-income funds are less risky because they tend to invest in dividend-paying companies with proven track records. Aggressive growth funds, on the contrary, include stocks with strong potential for growth, regardless of risk. Such stocks are often those of small, less-established companies in risky industries.

"People are being extremely reckless," said Carl Wittnebert, TrimTab.com's director of research. "I guess the recent stock market rally has really drawn people's attention. The public seems oblivious to risk."

Feeling Left Behind

When the economy was in a slump, Ronnie Kahn, a certified financial planner in Woodland Hills, Calif., spent much of his time talking to clients about certificates of deposit, money market funds and other conservative investments. Now, the same clients want in on the next hot Internet IPO.

"These are smart people who are gambling," he said, adding that many people are making investment decisions based on tips from friends. "This is happening a hundred times more than before. "People will say, 'He drives a nice car, so he must have good advice.' They're not looking at their overall goals or objectives."

David Morganstern, a certified financial planner at Capital Management Consulting in Portland, Ore., said his firm has decided to recommend more technology investments, partly due to client demand.

Morganstern said the stellar returns of such technology stocks as Microsoft, Cisco, have led even the most conservative investors to want to carve a piece of the tech pie for themselves.

"Some are feeling left behind, and they're saying they want a piece of the action," he said. "Plus, technology is no longer a fad. In the world of investing, it's here to stay."

Purge the Urge

Still, Jeffrey Molitor, principal of portfolio review at the Vanguard Group stressed that investors must understand the cyclical nature of the stock market, and that the mind-boggling gains won't last forever. Molitor said he recently overheard a conversation at his doctor's office, in which a receptionist told her co-worker she should start trading stocks to buy a rug she had her eye on.

He said many clients also have urged Vanguard to start an Internet fund and an index fund tracking the Nasdaq. The investment company has resisted both proposals, citing a lack of diversification.

"As returns have increased, so have expectations," he said. "What can then happen when expectations get out of line, investors will take action for wrong reason."

Molitor said investors should try to keep diversified portfolios, and they must consider their time horizons when they make investment decisions.

"We encourage investors to know why investing," he said. "If you don't have to touch the money in five or 10 years, maybe it's okay to take more chances. But if you need the money sooner, definitely not."