revolution as a result of Government's decision to relax exchange controls and interest rates. Business reports that the move could have much broader ramifications.

Bermuda investment managers and stockbrokers are gearing up for an expected boom in the exporting of money for investment purposes.

In anticipation of last Monday's Budget, Bermudians were bombarded with advertising and other publicity on overseas investing for weeks. And investment firms have been playing up the record performances of the funds they represent.

Most Bermudians have traditionally had a limited number of options for investment -- bank deposits with a maximum seven percent interest rates, local stocks and local real estate. The alternative has always been to pay the ten percent tax on foreign investments.

With the tax due to be reduced to one quarter of one percent in the Budget -- and with the $25,000 cap likley to be lifted, a whole new range of possibilities for investment have arisen.

While more and more people are scrambling to understand concepts like mutual funds, equities, derivatives and emerging markets, some investment managers believe that the changes could bring social and political change to Bermuda.

"If more people are becoming investors and the recent advertising is the best evidence that people expect more people will invest, you can also expect social responsibility to grow,'' said Mr. Preston Hutchings, director of Butterfield Asset Management.

"When people become investors, they become more conservative, and more interested in what the Finance Minister is doing,'' he said.

"They become more serious students of politics and economics, ensuring in the long term, a much more stable society. They have a direct interest, suddenly, in the stability that they see as necessary to safeguard their investment.'' Kast Investment Management president Mrs. Anne Kast said the best evidence of that in the United States, where there has been an explosion in mutual funds.

"It used to be just the elite class who worried about inflation. But millions in the US now are into bond funds. The awareness becomes much more focused.

And the US is considered to be a very stable country, relative to the rest of the world.

"Even here in Bermuda now, a private banking system is being offered to the little guy. That is a fact of business today. But it used to be only in the domain of the rich. This is partly due to competition and the explosion in the investment field.'' Mr. Scott Lines of Lines Overseas Management said local investors will move money abroad to reduce risk through geographic, economic and political diversification.

But the industry is quick to warn against Bermudians jumping into the overseas investment market, or any investment, without careful thought and consideration to goals, trends and risks.

President of Bermuda Asset Management and chairman of Gulf Stream Securities, Mr. E.T. (Bob) Richards, puts it bluntly: "It's no longer a no-brainer like it used to be. It needs thinking and analysis.

"With interest rates so low it might not be so wise to invest in certain equities and other things that can be especially risky, when mutual funds would be the way to go.'' Mutual funds are being targeted by many investors at the moment, especially after the roaring success of last year. With interest rates still depressed worldwide, people will continue to look to such forms of investment, investment managers said.

But Mr. David Bolden, President of Emerald Financial Limited, warns Bermudians to beware of hype and he has some concern about the abundance of local advertising by investment companies.

"There needs to be more information to the consumer, because the advertising, in some cases, has been misleading. 1993 was one of the best markets ever.

People need to know that there are risks. I feel that it is a little unfair to represent last year's successes as typical returns.'' Analyst with Bermuda Investment Advisory Services Limited, Mr. Mark Melvin, says that broad-based portfolios, like mutual funds are a safe form of investment compared to individual equities -- unless one has specific knowledge.

Mr. Melvin said: "In terms of investment, the world is truly your oyster now.

Just don't put all of your eggs in one basket.'' Investment managers are also reminding potential clients there are sometimes good, safe investments closer to home and they should not abandon local opportunities.

First Bermuda Securities president Mr. Jeff Conyers said: "A lot of times, the best investments are right under your nose. You still have to focus on Bermuda, and there are still a lot of local opportunities here.'' That is not to say one should abandon the idea of overseas investment altogether.

The overseas investment is the wave of the future with the changes toward de-regulation. Some investment managers are already convinced that the $25,000 limit on overseas investment should be relaxed. The first step by government toward encouraging more overseas investment was pegged by some industry sources as being overdue.

Meanwhile, Performa Securities Vice-President, Mr. Shaun Davis said: "We can do away with exchange control completely, as long as the Minister continues his plan to do it slowly. You can't keep Bermuda confined forever. We have to wake up, and catch up with the rest of the world in investment trading.'' Ardent Investment Management President Andrew Doble, has a more conservative approach, saying the investment cap of $25,000 should not be relaxed.

He says it could create a problem, if people were selling off fixed assets like houses to move large sums of money overseas. Keeping the current cap in place negates the chance that people will sell property to move their capital overseas.

Even now, he says, people need to be cautious about their plans. "People must be prudent about their investments. They must try to avoid the flavour of the month. Because investors have been so restricted in the past, you have to hope that they will maintain a conservative approach for the future. You can'tthrow all your money into the emerging markets right away.'' On a related note, James Masters, the Senior Vice-President and General Manager of corporate banking at the Bank of Bermuda, says that its still important to keep an emphasis on savings.

"There are a lot of opportunities for our customers, and we have tried to increase the number of people who are saving regularly, even if it is a small amount a week. We have tried to impress upon people that they must dedicate some portion of their income to savings.'' Mr. Preston Hutchings Mr. E.T. (Bob) Richards.

Mr. James Masters