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MONEY SMALL INVESTOR INDEX: SMALL INVESTORS BET ON LOW INFLATION

 /ADVANCE/ NEW YORK, Jan. 10 /PRNewswire/ -- In their headlong rush into growth stock mutual funds, individuals are abandoning traditional inflation hedges such as the shares of gold-mining, natural resources and energy companies, according to data gathered for Money magazine's Small Investor Index.
 Since the beginning of December, individuals have put more than $16 billion of fresh cash -- a record -- into growth-stock mutual funds, according to AMG Data Services in Arcata, Calif. By contrast, they have pulled $10.3 million out of gold and natural resource funds and $1.2 million from energy funds over the same period.
 Gold, natural resources and energy prices often soar when inflation speeds up. Just before inflation peaked at 14.7 percent in early 1980, for example, gold reached $859 an ounce, compared with $329 today, and oil hit $42 a barrel, vs. $19 today.
 While growth stocks would be hurt by rising inflation, investors are probably right not to be worrying about a flare-up anytime soon, according to analysts. If the economy grows less than 3 percent -- as most experts predict -- inflation probably won't increase more than half a percentage point to around 3.5 percent. Still, says strategist Tim Hayes at Ned Davis Research in Venice, Fla., "I wouldn't sell gold now that it's near a seven-year-low." Even with moderate inflation, gold could benefit from a flight to safety should another currency crisis hit. He warns, however, that energy stocks do not have the same advantage.
 Last week, the typical individual investor's portfolio, as tracked by the Index, fell 0.3 percent to $44,638. Stocks lost $124, and bonds gained less than $1. CDs and money funds contributed $10, while gold lost $4. With the new year, Money has revised the Index, setting it back to 100 as of Jan. 1, 1993.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 99.73 100.00 94.67 -0.27% +5.34%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 98.92 -1.08% +6.26%
 ASE/OTC 100.19 +0.19 +9.42
 Equity funds 99.37 -0.63 +4.28
 Bonds:
 Taxable bonds 99.92 -0.08 +6.99
 Municipals 100.13 +0.13 +8.00
 Bond funds 99.98 -0.02 +6.13
 Cash:
 CDs 100.07 +0.07 +4.10
 Money funds 100.05 +0.05 +3.18
 Other:
 Real estate 99.22 -0.78 -8.88
 Gold 98.19 -1.81 -19.34
 Jan. 1, 1993 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 23.12% 23.49% Bond funds 6.55% 5.22%
 ASE/OTC 7.30 7.42 CDs 14.67 17.57
 Equity funds 6.31 5.08 Money funds 24.59 22.73
 Taxable bonds 8.83 9.86 Real estate 0.61 0.77
 Municipals 7.56 7.30 Gold 0.47 0.56
 Sources: Bank Rate Monitor, the Federal Reserve, IBC/Donoghue's Money Fund Report, Investment Company Institute, Lehman Bros., Lipper Analytical Services, Merrill Lynch, Morgan Stanley Capital International, National Association of Real Estate Investment Trusts, Prudential Asset Management, Standard & Poor's, Robert Stanger & Co., World Gold Council.
 -0- 1/11/93
 /NOTE TO EDITORS: This material is also available in printable form from AP GraphicsNet and Access services for graphics and tables (under the file name MoneyIndex) and from PR Newswire for full text./
 /CONTACT: Jordan Goodman of MONEY, 212-522-3618, or Patti Straus of MONEY public relations, 212-522-2695/


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Date:Jan 8, 1993
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