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MONEY SMALL INVESTOR INDEX: SMALL INVESTORS PICK STOCK FUNDS OVER STOCKS

MONEY SMALL INVESTOR INDEX: SMALL INVESTORS PICK STOCK FUNDS OVER STOCKS
 /ADVANCE/ NEW YORK, Feb. 23 /PRNewswire/ -- Since the beginning of 1990, small investors' holdings of stock mutual funds have grown six and a half times as fast as their investments in individual stocks, according to MONEY magazine's Small Investor Index.
 The total value of investments owned by adult Americans has increased $660 billion to nearly $8 trillion over the past two years. But because investors have trimmed their individual stockholdings from 30.3 percent to 28 percent of their portfolios, the amount of money they keep in stocks has risen by only $18 billion, despite a soaring market.
 By contrast, small investors have increased their holdings of equity funds -- from 3.6 percent to 5 percent of the average portfolio. That represents a $130 billion rise. These allocations reflect revised Federal Reserve statistics released last week.
 In addition, short-term assets have slid from 41.8 percent to 40.1 percent of the average portfolio. That reduction came from certificates of deposit, which lost $176 billion in the past two years as rates fell from 7.7 percent to less than 4 percent.
 Bonds and bond funds, which still yield around 8 percent, have grown from 22.8 percent to 25.6 percent of the average portfolio -- an increase of $376 billion.
 Financial planners say that the shift from stocks to professionally managed funds makes sense. But they warn that rushing into bonds now may be risky. "It was fine to move into long-term bonds in 1990," says James Shambo, a financial planner at the Colorado Springs C.P.A. firm of Sarden Shambo & Anderson. "But it could be dangerous today, because interest rates are likely to rise, which would depress prices."
 Last week, the Small Investor Index, revised for the new Fed data, fell $7 to $45,450. Stocks lost $26, while bonds added $13. CDs and money funds contributed $14.
 This Last Year % Change from a
 Week Week Ago Week Ago Year ago
 101.85 101.86 90.74 -0.02% +12.25%
 Latest changes for each asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks
 NYSE 102.68 +0.14% +17.04%
 ASE/OTC 113.04 -1.07 +41.63
 Equity funds 105.63 -0.29 +20.69
 Bonds
 Taxable Bonds 99.08 +0.10 +10.89
 Municipals 100.22 +0.20 +9.85
 Bond funds 99.85 0.00 +12.79
 Short-term assets
 CDs 100.68 +0.08 +5.79
 Cash 100.61 +0.07 +4.89
 Other
 Real estate 99.11 -0.47 3.57
 Gold 100.30 -2.37 +3.06
 Dec. 27, 1991 equal 100
 Where average small investors have their money now
 Current Year Ago Current Year Ago
 NYSE 21.30% 21.80 Bond funds 5.16% 4.13%
 ASE/OTC 6.73 6.88 CDs 16.93 19.84
 Equity funds 4.95 3.89 Cash 23.12 21.30
 Taxable bonds 12.96 13.24 Real estate 0.78 0.76
 Municipals 7.52 7.62 Gold 0.55 0.53
 Sources: Bank Rate Monitor, IBC/Donoghue's Money Fund Report, the Federal Reserve, 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- 2/24/92
 /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/ CO: ST: IN: SU: ECO SH -- NY052 -- 1481 02/21/92 15:37 EST
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Date:Feb 21, 1992
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