First inflated by cocktail-napkin business plans for dot-coms, the aftermath of that bubble bursting opened the first Bush term. Stocks plummeted. The economy contracted dramatically in the third quarter of 2000, followed by a full-blown recession in March 2001 and the horror of Sept. 11. Federal Reserve Chairman Alan Greenspan cut interest rates down to practically nothing and, with help from the Bush administration's tax cuts and unbridled spending by Congress, created easy-money housing and credit bubbles during the Age of Froth.

The third bubble explosion in less than a decade has left us dazed and confused and thinking: "Can I ever retire?"

With that question in mind, I headed off to Boston to seek the advice of Nobel Prize winners in economics, and other financial savants, in hopes of finding out how retirement portfolios could be salvaged.

The general advice from the home of Harvard University and the Massachusetts Institute of Technology is that once you have picked a reasonable financial course, keep the faith. A mix of stocks and bonds and inflation-protected securities can do well over time if the economy is mostly healthy.

If you do it right, your portfolio needn't keep you up at night. Robert Solow, 84, who won the Nobel in 1987, says he doesn't know what's in his portfolio and hasn't worried about it.

"I just never paid any attention," Solow said, who still has an office in the MIT economics department. His nonchalance, however, isn't to be confused with no preparation.

Core Portfolio

Robert Merton, 64, who studied under Solow and won a Nobel Prize 10 years later, said what most good financial planners tell clients: Diversify across asset classes and the world.

With his portfolio in a global stock-index fund and Treasury inflation-protected securities, or TIPS, Merton is tapping profits and trying to beat the cost of living. He's now avoiding real-estate investment trusts with commercial properties.

While Merton didn't discuss his experience with the failure of hedge fund Long-Term Capital Management in 1998, he said he was glad he invested in TIPS, which are U.S. Treasury bonds indexed to the government's understated cost-of-living index.

Merton, known for his research on options pricing, was one of the founders of LTCM, which had to be bailed out by the New York Federal Reserve and large banks when it threatened the health of the global financial system.

"I only lost 8 to 12 percent during a flight to quality," Merton said of his recent investment in TIPS during the meltdown of the past few months.Importance of TIPS

None of the Nobel laureates offered a financial forecast. It's folly since a recession, housing turmoil and credit-market woes cloud the outlook and will probably last into next year.

Beating inflation over time, though, was a more prevalent theme at the Oct. 23 Boston University conference where the Nobel laureates were asked to talk about retirement saving.

The organizer of the conference, Zvi Bodie, a finance professor at Boston University, has long counseled in favor of using TIPS as a bulwark against not only inflation, but against stock- and bond-market risk.

Even if deflation is the next demon to ravage the global markets -- where prices and spending decrease broadly -- Bodie says TIPS offer some protection since the securities provide a floor on nominal value, which is a guaranteed return.

"The most vulnerable investors should be pouring their money into TIPS," Bodie said.

Buying Stocks

What about stocks? Isn't there some great value out there? Warren Buffett inspired confidence when he wrote on Oct. 17 in the New York Times: "Over the long term, the stock market will be good."

Most people aren't Buffett. They won't buy at low prices and hold. They will jump in and out of the market and get burned.

"History teaches no lessons," warns Paul Samuelson, who won his Nobel Prize in 1970, and at age 93 said he would consider retirement "when I grow up."

"You don't know when to get back in," Samuelson added.

Bodie argues that while diversifying among stocks may be attractive, the risk never diminishes.

If you need your money within the next seven years, most of your portfolio should be in TIPS. If you need a guaranteed income stream with some tax breaks, seek highly rated municipal bonds.

You also need to undergo the ultimate reality check: Some of what you lost in home equity or stocks may never be regained.

"A lot of wealth is gone and there's no reason for it to come back," says Merton, who estimates that US$4 trillion has been lost in real estate and about US$8 trillion to US$9 trillion has evaporated in global stock markets.

Where to turn in this gloom? You can't reliably rebuild your portfolio by taking on more risk and chase the next bubble. Focus on guaranteed, inflation-indexed income when you need it most.

Being introspective will help. Take stock of what you do best -- your human capital -- and invest in it. "Think how valuable human capital is," Merton added. "If you are doing what you like, it's a pretty big deal."

John F. Wasik, co-author of "iMoney," is a Bloomberg News columnist. The opinions expressed are his own.