Q. Dear Mr. Berko: Would you explain Wi-Fi to me and tell me how it works? I have $10,000 to invest in Wi-Fi stocks, but I don't want to take too much of a gamble. I don't know the names of any Wi-Fi stocks, but if you think this business has good growth potential could you recommend some that you think will be a good investment for my money?

R.M., Aurora, Ill.

A. Dear RM: Wireless Fidelity is an international standard from the Institute of Electrical and Electronics Engineers for wireless local area networks operating up to 11 megabits per second with a broadcasting range between 100 and 1,000 feet. Its marketing moniker, "Wi-Fi," is becoming the most popular worldwide standard for setting up local wireless networks in public places, homes and offices.

Attach Wi-Fi to a broadband modem with an inexpensive receptor about the size of a credit card and you can connect to the Net while having bourbon at a nearby bar with your bookie or relaxing in a chaise lounge at the Plaza Hotel pool in Cancun, Mexico. Wi-Fi uses the same unregulated radio spectrum used in your home for a baby monitor or a cordless phone. The signal is broadcast from a series of antenna networks called "hot spots."

Hot spot operators or wireless companies build an array of these networks in such places as hotels, office buildings, airports and conference centers. The operators share a piece of the revenues with the landlord. An industrial-strength network (kit, caboodle and construction) costs about $2,000, and they are changing the soul of the World Wide Web.

Wi-Fi is a resounding success; three years ago there were 2.5 million users and today that number has grown to 19 million. Estimates indicate that there will be more than 100 million Wi-Fi users by 2006 and perhaps more than 1 billion a decade from now. The challenge is to convert this powerful technology into profit-producing enterprises.

Last year, in the throes of a bear market, venture capital firms invested almost $3 billion in more than 260 Wi-Fi startups. Your $10,000 is a pittance to these big league boys. There are a number of private hedge funds that cumulatively have large positions in this new industry.

Unfortunately, participation is by invitation only, and you are not on their short list. There are flocks of penny stocks trading on the bulletin board, some of which are legitimately Wi-Fi active. But this alternative probably has a high potential for failure and penny stocks don't float my canoe.

I suspect that some large fund groups like Vanguard, Merrill Lynch or Fidelity will bring out Wi-Fi funds that may become the next "in thing" to have in your portfolio. But that could be a couple of years away.

Wi-Fi today is in its infancy just as cellular phones were 15 years ago. Believe me when I say this technology is growing and changing by orders of magnitude. I believe it would be better to purchase established companies that are in the forefront of this industry.

Dell Computer Corp. (DELL-$31) is building Wi-Fi into all its computers. More than 90 percent of new laptops will be Wi-Fi capable in the next couple of years. Consider Intel Corp. (INTC-$20), which is promoting its new powerful Centrino Wi-Fi chip and is the leader in the industry. Look at Cisco Systems Corp. (CSCO-$16), which just spent $500 million to buy Wi-Fi equipment maker Linsky Group.

Check Microsoft Corp. (MSFT-$25), which got into the Wi-Fi equipment game last year and will go head-to-head with Cisco. Microsoft Windows XP operating system is adapted to handle Wi-Fi. Finally, give thought to International Business Machines Corp. and AT&T, which have joined with Intel to build a nationwide Wi-Fi array called Cometa Networks that expects to have 5,000 commercial hot spots ready by year end.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, FL 33429 or e-mail him at malber@adelphia.net.