A little help in choosing a mutual fund


More than 3,400 mutual funds are registered with the Securities and Exchange Commission, and that can make selecting one awfully difficult.

Shearson Lehman Bros. has a free booklet that might help. It's called "Finding Your Way: A Guide to Mutual Fund Investing." It points out some of the benefits of mutual-fund investing, how to evaluate a mutual fund and how to avoid five common mistakes.

To order, call (800) 233-7833, Ext. 3838. If you call, your name may be put on a mailing list to receive unsolicited sales material in addition to the free booklet.

Don't follow the crowd

If you want to make money in the mutual fund market, don't follow the crowd. That's the lesson investors should learn from a recent study conducted by Oppenheimer Management Corp. In

reaching its conclusion, the New York company looked at mutual fund sales and performance since 1987.

Here's what it found:

If a person had bought mutual fund shares when sales were most frenzied and sold when the crowd sold, he would have earned just 19.4 percent since 1987. In comparison, a lowly money-market fund would have earned about 42.4 percent.

The report, which was paid for by the Wall Street Journal, said crowd-followers did poorly because they tend to buy when prices are high and sell when prices are low. Successful investors do the opposite.

Insurance ratings

Life insurance companies are finding it harder to get an A-plus financial rating this year.

At A. M. Best, for example, 96 companies among the 1,664 surveyed had their ratings lowered, and only 22 ratings were raised.

Experts say the lower ratings reflect two factors: The financial health of the industry has weakened in recent years, and rating firms have gotten much stricter.

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