We enlisted business correspondent and host of Cashin' In, Terry Keenan to help you out with some of your financial concerns.

Last week, the The Balance Sheet asked you to submit your financial question to Terry, and as promised, here are your answers.

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Dear Terry,

Can you please enlighten me as to why WorldCom dropped in price so fast.  I have had this stock for years, and have never seen it at this low.

Thank you — Bob, El Paso, Texas

Dear Bob,

Unfortunately you're not alone. Thousands of WorldCom shareholders have shared your pain in recent months as the stock has crumbled under a heavy debt load and a spiralling stock price. During the 1990s WorldCom over-expanded using its highly valued stock to make acquisitions. Those deals also pumped up earnings creating an illusion of spectacular growth that really wasn't there. As the stock began to crumble, WorldCom could no longer do those deals and Wall Street discovered belatedly that the company really wasn't growing as much as they thought.

As for the stock now, history shows that once stocks fall below 5 dollars a share they rarely make a comeback to double-digits — especially if they're a telecom or technology stock.

Terry,

I've watched the price of gold steadily climbing in the last several months.  Should this be considered as an investment option, and if so, to what extent of one's investments percentage wise? 

Thank you — Christopher

Christopher,

You're right, gold and gold stocks have had a spectacular run in the last 6 months with gold stocks actually outperforming gold, the metal. Jonathan Hoenig, a regular on Cashin' In has been correctly bullish on gold for some time now and he still likes the gold stocks. The safest bet is to put some money into a gold fund — Vanguard has a fund with very low fees. 

Traditionally, the rule of thumb on Wall Street is to invest only about 5 percent of your portfolio in precious metals, and given the recent run-up in prices it's probably a good rule to follow now.

Dear Terry,

A few days ago I received a marketing piece in the mail asking me if I'd be interested in investing in the "Franklin Pennsylvania Tax-Free Income Fund."  The fund seeks to provide investors with high current income exemption from regular federal and Pennsylvania state personal income taxes.  Would this be a wise, secure investment for money I've been laying aside?  I'm looking for a low-risk, long-term, high-yield investment. 

Thanks — Tammy 

Dear Tammy,

Municipal bond funds are a good choice for investors in a high income tax bracket such as you — and if you are a Pennsylvania resident this fund could be a choice for you. However, as Dagen McDowell a contributor on Cashin' In notes, if you live in another state you will be better off finding a fund tailor-made for your state. In addition, check carefully the amount of fees any muni-bond fund carries. Because the returns are fairly low, high expense ratios, or even worse, a load on the fund will cut into your returns significantly.