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MONEY SMALL INVESTOR INDEX: DEPOSITORS LIKELY TO PULL BILLIONS OUT OF CDS

 NEW YORK, Oct. 11 /PRNewswire/ -- As $110 billion in certificates of deposit mature this month, millions of Americans may be tempted to pull their money out of the bank and seek higher returns in stocks or bonds, according to data gathered for Money magazine's Small Investor Index. The dilemma: CDs, while safe, currently yield as little as 2.5 percent; securities, while potentially much more rewarding, carry substantial risks in today's high-priced markets.
 Many depositors whose CDs matured earlier this year have already taken the more adventurous route. From Jan. 1 through the end of September, Americans withdrew $92 billion from CDs, a rate of about $10 billion a month. Over the same period, small investors added about $200 billion to mutual funds. Other depositors with maturing CDs chose to roll their money over into five-year certificates, which yield 4.5 percent on average, vs. 2.6 percent for six-month CDs. Market analysts anticipate a similar exodus into mutual funds and longer-term CDs this month.
 Investment strategists suggest that depositors who plan to leave their money invested for five to 10 years may be better off shifting into mutual funds, because stocks and bonds offer higher long-term return potential. On the other hand, people who don't want to risk even temporary losses should stick with CDs. "To boost your yield significantly, you either have to buy long-maturity bonds or delve into junk bonds, both of which offer far greater risk than a CD," says Gerald Guild, manager of the fixed income department at Advest in New York City.
 Last week, the Money Small Investor Index, which tracks the typical individual's holdings, rose $97 to a record $49,608. Stocks gained $26, while bonds returned $46. CDs and money funds added $9.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 107.01 106.80 95.78 +0.20% +11.72%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 107.71 +0.11% +15.93%
 ASE/OTC 112.64 -0.04 +32.87
 Equity funds 111.03 +0.31 +20.26
 Bonds:
 Taxable bonds 109.32 +0.29 +9.89
 Municipals 111.66 +0.90 +14.43
 Bond funds 109.78 +0.27 +10.33
 Cash:
 CDs 102.72 +0.06 +3.58
 Money funds 101.90 +0.04 +2.51
 Other:
 Real estate 98.86 -0.18 -0.53
 Gold 148.62 +5.46 +38.21
 Jan. 1, 1993 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 25.86% 26.72% Bond funds 7.68% 6.24%
 ASE/OTC 8.17 8.44 CDs 12.65 14.70
 Equity funds 8.30 5.80 Money funds 23.62 23.67
 Taxable bonds 6.09 6.92 Real estate 0.89 0.76
 Municipals 6.05 6.25 Gold 0.67 0.49
 Sources: Bank Rate Monitor, the Federal Reserve, Investment Company Institute, Lehman Bros., Lipper Analytical Services, Merrill Lynch, Money Fund Report, Morgan Stanley Capital International, National Association of Real Estate Investment Trusts, Prudential Asset Management, Standard & Poor's, Robert Stanger & Co., World Gold Council.
 -0- 10/11/93 R
 /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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GK -- NY049R -- 0510 10/11/93 07:21 EDT
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Date:Oct 11, 1993
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