          
          
          
          Make Your Money Work Harder When Interest Rates Are Low
          
          
               Today's low interest rates are hitting people
          hard.  Many have tolerated the dismal yields on CDs and
          money markets with the hope that rates will recover
          soon.
               But they shouldn't hold their breath.  A survey of
          historical returns shows that today's rates are very
          close to normal.  Since 1926, Treasury bill rates have
          averaged 3.7 percent annually.
               Confronted with this reality, people must find
          ways to make their money work harder.
               The dread of assuming a higher risk often
          discourages people from moving to higher yielding
          corporate bonds, municipals and other fixed income
          securities.  But what's so safe about earning a
          negative return from a CD?  After deducting taxes and
          inflation, today's rates are earning a negative yield. 
               If you like investing in individual bonds, you can
          assemble a bond ladder of different maturities to
          reduce the risk of rising interest rates and longer
          maturities.  Investors who want professional asset
          management can diversify through income oriented mutual
          funds.  However, be aware that a fund's value will
          fluctuate with the rise and fall of interest rates.
               Don't shy away from stock mutual funds simply
          because you live on a fixed income.  If you're a
          younger retiree, you need to maintain a growth
          component in your portfolio.  In addition, utility
          stock funds and balanced funds can offer income and
          growth in moderate doses.
               Managing your money is serious business,
          especially when assembling a securities portfolio that
          meets your expense needs.  Don't hesitate to consult a
          professional advisor.
               One of the most dangerous bits of advice floating
          around is telling people to do it themselves and look
          for a discount stock broker who will give them the
          lowest price per trade.  If you aren't an experienced
          market trader, you should be using professional
          managers, and you should not be trading so often that a
          $10 commission difference per trade makes a difference
          to you.  Most people who lose in the stock market try to
          pick their own stocks, use discount brokers, and don't
          have a diversified, professionally managed portfolio. 
          Of course, the very magazines that run great articles
          comparing trade commissions at different discount
          brokerage houses are the very magazines that have pages
          of expensive advertising from discount brokers -- so
          they're not about to suggest to you that perhaps your
          best deal is to avoid the discounters and pay for a
          more profitable and safer portfolio.
          
          
          
