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Particularly Frightening

March 01, 1987

The Feb. 22 article "Mutual Funds: Confusion Mars the Boom" is particularly frightening for elderly people who are heavily invested in the stock market and depend on it for steady income. There is enough material here for a sustained nightmare, and it makes one wonder if stocks and bonds should now be eliminated from one's portfolio and the money put under the mattress. First, let me say to Carl McWade that if he thought he was making a foolproof investment when he bought a mutual fund investing in bonds backed by Ginnie Mae, he was deluding himself--there is no such thing as a foolproof investment, at least not on Wall Street. There is a certain amount of risk in everything we do, today more than ever.

Secondly, if McWade found that his investment depreciated 5% over seven months, what does he expect of a market that fluctuates in value every hour of the day, five days a week? Eight months after he bought the fund it could have been up much more, depending on market activity, interest rates, etc. That is the risk one always takes when investing in anything.

If new regulations are imposed, that is well and good both for investors and the climate on Wall Street. What is now happening to the "insiders" because of unscrupulous behavior should stand as a permanent warning to those who think they can become instant millionaires at the expense of millions of investors who expect a reasonable and honest return on the money they have worked for, saved and invested to attain security and peace of mind in their twilight years.

MONROE RUBINGER

Beverly Hills

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