This week investment news and ratings services indicated that Federal Reserve analysts and some economists are predicting that interest rates will be raised by September, 2003.

Reports from US companies are also quite a bit more positive, both from a profit perspective, and an employee hiring perspective; about 40 percent of businesses overall indicating that they will be hiring next year.

If these projections turn into good hard performance facts, the American public may feel somewhat encouraged.

While we hope that they may revert to increased consumption, they will need to bring personal debt as a percent of household expenditures under control first.

INVESTORS ARE DISHEARTENED.

AS THIS MARKET CONTINUES TO CREEP BACK UP, THERE IS A LITANY OUT THERE OF LOCAL STORIES ABOUT HAVING TO MAKE CONFUSING INVESTMENT DECISIONS, WHILE LOOKING AT VERY TOUGH PERSONAL INVESTMENT LOSSES.

THESE ARE NOT RUMOURS, THEY ARE REAL, AND UNFORTUNATELY THERE ARE FAR TOO MANY OF THEM.

THE MOST COMMON SITUATIONS ARE JUST HEART BREAKING: SOON-TO-BE RETIREMENT SAVINGS NOW WORTH 50 PERCENT LESS; DISCRETIONARY ACCOUNTS TRADED AWAY TO A FRACTION OF THEIR ORIGINAL VALUE; DREAMS OF OWNING A HOME PUSHED FAR FORWARD IN TIME BECAUSE THE MONEY INVESTED HAS NOT GROWN, IT HAS SHRUNK.

THESE FACTS ARE UNFORTUNATELY ALL TOO CLOSE TOO HOME, IT ISN'T JUST ABOUT THE SMALL AMERICAN INVESTOR EITHER.

Confusion reigns.

At this point, many local investors are totally bewildered by the continued changes in the interest rate environment.

It is worth noting that for many residents this is an investing world that they have never seen nor do they know how to cope with it.

Talk about upsetting the ebb and flow of a quiet Island lifestyle!

They feel that the advice they are receiving is often contradictory, vague, or simply the all-too-familiar-repetition of the talking heads as seen on CNBC, 'think about the long-term' and 'don't put all your eggs in one basket'.

Amazingly, through it all, these same local investors have remained somewhat philosophical, not as angry as one would think; however, their overwhelming question mark is what to do now.

FIXED AND TIME DEPOSITS.

IF YOU ARE WILLING TO SHOP AROUND, AND CAN FINANCIALLY ALLOW YOUR DEPOSIT TO BE LOCKED UP FOR AS LONG PERIODS, THERE ARE SOME HIGHER RATE (THAN THREE PERCENT) FIXED DEPOSIT PRODUCTS AVAILABLE.

SPACE AND CONFLICTS OF INTEREST DO NOT ALLOW ME TO LIST THESE HERE.

USE YOUR CONSUMER INSTINCTS; PRETEND YOU ARE LOOKING FOR A GOOD DEAL ON A VACATION.

YOU KNOW WHAT TO DO THERE!

UNFORTUNATELY, THOSE THAT MUST DERIVE A MONTHLY INCOME FROM THEIR FIXED DEPOSITS ARE IN A MUCH MORE PAINFUL POSITION.

TRY TO ECONOMISE AS BEST YOU CAN, THESE LOW RATES WILL NOT LAST FOREVER.

BE FOREWARNED!

If you are guaranteed an interest rate of anything more than six percent or so - on a long-term basis - understand that you are being offered an investment product that is not guaranteed and may be very risky.

No institution is paying those rates on a guaranteed-return basis.

STREET MORTGAGES.

MORE BERMUDIANS THAN THE BANKS WOULD LIKE TO CONTEMPLATE ACTUALLY ACT AS MORTGAGE HOLDERS, LENDING OUT MONEY AT GOOD RATES FOR THEM AND CONVENIENT ACCESS FOR THE BORROWER, SOMEWHERE IN THE VICINITY OF SEVEN TO NINE PERCENT ANNUALLY.

GENERALLY, THE BORROWERS HAVE NOT BEEN ABLE TO OBTAIN CONVENTIONAL FINANCING.

IF YOU ARE CONSIDERING THIS LEAP OF FAITH TO MAKE $7,000 ANNUALLY ON A $100,000 INSTEAD OF SAY $4,000, UNDERSTAND THE RISKS.

WHAT HAPPENS IF THE BORROWER IS MADE REDUNDANT, OR WORSE STILL BECOMES DISABLED?

ARE YOU PREPARED TO TAKE THE BORROWER TO FORECLOSURE IN THE EVENT OF DEFAULT?

CAN YOU AFFORD THE LEGAL FEES?

CAN YOU AFFORD THE LOST OPPORTUNITY WHILE YOUR MONEY IS TIED UP FOR ONE, TWO, THREE YEARS?

CAN YOU AFFORD THE EMOTIONAL STRESS OF FORCING A DISABLED PERSON WITH A FAMILY INTO THE STREET?

CAN YOU AFFORD TO 'FIX UP' THE PROPERTY AFTER FORECLOSURE TO READY IT FOR A REAL SALE, IN ORDER TO RECOUP YOUR ORIGINAL LOAN.

Mutual fund investments.

Here's a common statement.

"I bought these mutual funds three years ago, and they have lost money.

"Now my advisor is telling me that they are not good funds and that I should sell them and reinvest in other mutual funds.

"Should I do this?"

FINDING QUALITY DATA.

BUT WHAT IF YOU DON'T?

SUPPOSING YOU THOUGHT THE ORIGINAL FUNDS YOU OWNED WERE JUST FINE - AT THE TIME.

HOW CAN YOU FIND YOUR MUTUAL FUND TRACK RECORDS?

THERE ARE QUESTIONS YOU NEED TO ASK FIRST, AND RESEARCH YOU NEED TO DO BEFORE YOU CAN ARRIVE AT ANY GOOD DECISION.

HERE IS ONE SIMPLE RESEARCH TEST.

Research.

Originally, mutual funds were developed to be bought and held for the long-term.

Ask your advisor for the most recent fact sheets and the correct name of your mutual funds.

Armed with that knowledge, assuming that these are offshore funds - most generally sold here are - go to www.fund-sp.com, then click on Offshore Funds, then click on Management Group, then find in the little box on the right the Fund Company your mutual fund is managed by.

If these are Canadian funds, please write to me and I will give the you the web addresses to review.

Once you click on the fund company, choose your mutual fund, click on the square green fact sheet box, and print it out.

There are many statistics, but you want to check out performance and consistency.

If your fund ranks in the top 25 percent (1) in both of these categories compared to the sector average and the benchmark over three to five to ten years, even though the fund is in loss territory now, it is still a winner.

You should probably hold, not sell.

Over time, this fund may well recover and produce nicely for your long-term goals.

IS THERE A CONFLICT OF INTEREST?

IS THIS ADVISOR THE SAME INDIVIDUAL WHO SOLD YOU THE ORIGINAL MUTUAL FUND?

OR, IS IT SOMEONE NEW?

BE SURE THAT THE REASON FOR A SELL RECOMMENDATION IS FACTUALLY ACCURATE.

OTHERWISE, YOU WILL END UP NOT ONLY BEING SLAPPED WITH BACK END CHARGES ON THE SELL SIDE OF THE OLD MUTUAL FUND, BUT PAYING ANOTHER COMMISSION ON THE BUY SIDE OF THE NEW MUTUAL FUND.

NONE OF WHICH MAY ACTUALLY SOLVE YOUR INVESTMENT PROBLEM.

@EDITRULE:

MARTHA HARRIS MYRON CPA CFPT IS A BERMUDIAN, A CERTIFIED FINANCIAL PLANNERT(US LICENSE) PRACTITIONER AND VP AND MANAGER, PERSONAL FINANCIAL SERVICES, BANK OF BERMUDA. SHE HOLDS A NASD SERIES 7 LICENSE, IS A FORMER US TAX PRACTITIONER, AND IS THE WINNER 2001-THE BERMUDIAN MAGAZINE - BEST OF BERMUDA GOLD AWARD FOR INVESTMENT ADVICE. CONFIDENTIAL EMAIL CAN BE DIRECTED TO MARTHAMYRONnorthrock.bm

The article expresses the opinion of the author alone, and not necessarily that of Bank of Bermuda. At the date of this article, the author held no hedge fund positions. Under no circumstances is this advice to be taken as a recommendation to buy or sell investment products or as a promotion for financial plans. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.