Local investment firms look forward to another enriching year.

The year for those in the money management, securities and corporate finance communities has been tremendously enriching, with the stock market posting yet another healthy year, and mergers activities eclipsing all records.

"If you are an investment banker, and not making money, you ought to consider gardening as a profession," said Jim Zukin, of the Westside-based corporate evaluation and investment banking shop Houlihan Lokey Howard & Zukin.

Nationwide, there were $482.2 billion worth of corporate mergers transacted in 1996, easily eclipsing the previous record $360.7 billion set in 1995, according to a report prepared by Houlihan Lokey.

There is scarcely an investment banking or brokerage shop in Los Angeles not looking to hire in 1997.

Can next year top this? Opinions are mixed.

At Salomon Bros. in New York, economist David Hensley said the forecast is for a "small decline" in corporate earnings next year. That would probably dent the market, cooling off buying ardor, both among ordinary investors and corporate titans seeking merger partners.

"We are much less ebullient for next year," said Hensley. "The market may have to struggle next year."

Other industry observers predict continued action for investment bankers, given the abundance of capital available and the huge numbers of middle-market L.A. companies that need financing for mergers and acquisitions.

"I think the amount of private capital will continue to increase, and the number of mergers will increase. The pace of mergers will not slow," said Michael Rosenberg, managing director at Barrington Associates, a Westside-based investment banking shop.

If the public markets cool, many companies will just seek private financing, said Rosenberg.

Barrington, with 14 professionals, is already perhaps the largest boutique investment banking shop in Southern California. But it wants to increase its staff to 20 next year, said Rosenberg.

Others are bullish, but cautious.

"We are looking at redwoods, but trees don't grow to the sky," said Peter Griffith, managing director at Wedbush Morgan Securities in downtown Los Angeles. "Sooner or later the market is going to cool off. It was up 30 percent-plus in 1995 and 20 percent-plus in 1996."

Still, Griffith said he expects M&A activity to continue unabated in 1997, and for initial public offerings and other investment banking work to increase over the longer haul. "There are so many start-ups in the works now, and they are going to seek (public) financing at some point," he said.

Most money managers expect another good year in 1997.

There is a general consensus that some of the strongest fundamentals in history are in place for Wall Street, which will provide a good environment for money managers (as well as stockbrokers and investment bankers), for the next several years, including 1997.

The big positives for Wall Street are: a maturing U.S. population, which will become more prone to save and invest with each passing year; low inflation; low interest rates; and moderate economic growth.

A huge tide of people - 76 million, ornearly one-quarter of the total U.S. population - will cross over the 50-year-old barrier in the next 10 years, according to U.S. Census Bureau statistics.

Already, stock market mutual funds are flush with inflows, running between $12 billion and $20 billion a year, according to industry news services.

Too, inflation appears tame, and few forecasts call for a break-out in inflation on the upside. The recent UCLA Anderson Business Forecasting Project quarterly report, for example, predicts inflation next year at 2.7 percent, as measured by the consumer price index, and around 3 percent annually for the rest of this decade.

With such a good foundation, "we expect next year to be very very good," said Daniel Genter, president and chief executive at RNC Capital Management Co. in West Los Angeles, a $1.2 billion shop.

Investors have few alternatives to the stock market, said Genter. Yields on bonds are low, and real estate appreciation muted. "People are going to have to deploy their assets into equities, if they want them to perform," he said.