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PERSONAL FINANCE : BACK TO BASICS : RIDING THE CREST : Fads and Frills Give Way to Basic Investing

June 19, 1988

Small investors shun stocks and flee to certificates of deposit. Cash pours into conservative money market funds, annuities and savings bonds. Investors are taking a hard look at their financial goals and reassessing their spending, saving and investing strategies.

Across the nation, the message is clear: Investment fundamentals are in. Fads and frills are out. Investors, burned by last October's stock market crash, want safety and reliability.

"Americans are getting back to basics," says Robert A. Hewitt Jr., chairman-elect of the International Assn. for Financial Planning.

The stock market crash is only one of several factors behind this trend. Tax reform is also changing the investment picture. The new rules have virtually wiped out demand for speculative real estate partnerships and other shelters as many upper-income investors opt for more attractive conservative investments that stress income over writeoffs.

Fears of resurgent inflation and a possible recession are also fueling investor jitters. Surveys show that Americans increasingly doubt their ability to attain one or more of their three biggest financial dreams: buying a home, paying for their children's college education and providing for a comfortable retirement.

This Personal Finance guide is designed to help you, like the girl in our drawing on the cover, get back to basics and reach those and other financial goals. On the following pages, you will find tips on how to start reading the economy so you can ride the crest of any rough times ahead.

There are suggestions on how to track down the best yields on certificates of deposit and tap the equity in your home. And you can gauge how far you have to go to reach your goals on a work sheet that will help determine whether you are saving enough or piling up too many debts.

If you need help developing a strategy that will guide you to your financial fortress, consider the recommendations provided by several Southland financial planners and consultants. Or take advantage of a list of where to go for some free advice.

To guide you through the investment jungle, there are stories on where to go to complain about your broker, accountant or other financial expert. And you'll find out how to identify the warning signs of investment scams so you can avoid being among the thousands of investors who unwittingly lose $40 billion to fraud each year.

There's even a short quiz to see to test your investment IQ.

Financial goals don't have to be out of reach. All it takes is a little planning today for you to receive your just rewards down the road.

Editor: Bill Sing, News Editor: Patricia Konley, Art Director: Patricia Mitchell, Art Assistant: Tracy Crowe

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