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From: ritter@spp1.UUCP (Phillip A. Ritter)
Newsgroups: net.invest
Subject: Mutual funds
Message-ID: <269@spp1.UUCP>
Date: Wed, 12-Mar-86 09:08:03 EST
Article-I.D.: spp1.269
Posted: Wed Mar 12 09:08:03 1986
Date-Received: Fri, 14-Mar-86 08:14:36 EST
Distribution: net
Organization: TRW, Redondo Beach  CA
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The current issue of Forbes magazine (I didn't notice the exact date - its the
one that just came in the mail, so it must be dated around 10 March) has a very
interesting article about the growth of mutual funds, especially bond funds.
It seems clear that the load/no-load discussions lately indicate an interest in
the funds, so this article in Forbes will probably be of interest to many of
you.

The basic theses of the article is that:
   a) The bond funds are growing at an astronomical rate (sales for 1985 were
      more that 4 times the previous record).
   b) Sales of ``safe'' funds (those investing largely or only in bonds or
      securities guarenteed by the U.S. Gov.) are growing fastest.
   c) Sales seem to be due to people missing the double-digit CD rates of two
      years ago.

This article goes on to remind people that, although the interest is guarenteed
by the Feds, and the principle will be paid back at maturity, there is still
considerable risk in these markets since the market value of the securities will
fall.  The Forbes article describes the current situation as a ``mania'', where
they define a mania to be a situation where many unsuspecting (perhaps misled)
investors are sure to get burned.  The current bond fund market is compared to
the market for growth stock funds in the late sixties.

I don't really wan't to say more than this.  I have only read the article once,
casually.  Also, remember that Forbes tends to be conservative (where
conservative does not mean avoiding risks, simply understanding them) and
contrarian (anything that everyone is doing is probably a bad investment).  I
simply feel that anyone who is going to commit a significant amount of money to
any investment needs to have as much information that can be obtained as
possible, and this article is very informative.

Phil Ritter
...ihnp4!trwrb!trwspp!spp1!frank!grimm!phil
-- 
Phillip A. Ritter