"I've worked myself up from nothing to a state of extreme poverty.'' -- Groucho Marx THE original plan for this week was to return to the series on mutual funds.

However, a story has appeared in the New York Times which has prompted some thoughts I wanted to share with you while they are still fresh. We will return to mutual funds before long.

The report says that New York investment bankers Goldman, Sachs are sponsoring a series of television programmes in Japan aimed at home makers. "Money Angels'' aims to unlock the mysteries of financial planning for Japanese housewives, who apparently control the purse-strings.

What struck me about the report was contained about half way down the page in a pair of comparative pie charts. They showed that, where American households have 71.4 per cent of their "liquid investments'' in stocks, bonds and mutual funds, their Japanese equivalents have just 12.1 per cent invested in such instruments. Japanese families invest fully 87.9 per cent of their money in bank deposits. The current rate of interest on yen is one per cent.

Here was a set of statistics I could understand. For although I weekly espouse the benefits of stock market investments and mutual funds, my money is not where my mouth is.

Perhaps I have Japanese blood. As I understand the term "liquid investments'', which is, broadly, funds which can be turned into cash at a reasonably certain value in a short space of time, my pathetic savings are 100 per cent invested in bank deposits, or the equivalent.

"Mention concepts like risk and reward, portfolio diversification and asset allocation to a typical Japanese home-maker,'' the New York Times says, "and be prepared for a bewildered stare, tinged with ever-so-slight disapproval; in Japan risk is a four-letter word.'' I must have Japanese blood.

What, I always ask myself, would persuade me to put at risk any of the dollars I have earned by the sweat of my brow? I have already paid taxes of one sort or another on the money. I have carved what savings I have out of hard work in the past so that I will be more comfortable in the future.

I have never owned a Rolex, which I would very much like to, because I'd rather save the $10,000 and have it, plus accrued interest, to spend on whatever I'm into when I'm old and grey. Okay, older and greyer.

To wake up one morning and receive a letter saying that my savings are now worth rather less than they were the last time I received a statement is the nightmare which would stalk my every waking minute if I were invested in the Dow at 11,000.

With investments, you have to pay attention. You have to know about global forces and local issues, comparative performance, investment managers and, above all else, you have to prepared to lose some or all of the money you have invested.

The Japanese method means that, if you have $100 in the bank and can manage without it for a year, there will be $105 in the account a year from now. The only three risks money in the bank takes are the collapse of (a) the bank, (b) the country or (c) the global economic system.

IF you stick to large banks in safe countries, you remain open only to the collapse of capitalism, at which point bonds are not going to be much use, either.

I accept that, for most people, five per cent is a little like walking away from the Crown & Anchor table evens after four hours; you'd almost rather lose, because then you could have a reaction.

What's more, I am convinced of the merits of concepts such as risk and reward, portfolio diversification and asset allocation as far as your money is concerned, if that is what you want to do with it.

My problem comes in two different directions at the same time.

Giving my money to a total stranger and hoping he's the best total stranger I could have chosen, is one problem. Investment managers are human and, in Bermuda, unregulated. Usually, they will return your money, but not always.

At the same time, I do not trust myself to pick stocks, no matter how much research I were to do. I also take the view that at current levels, stocks are over-priced and that in the long run, everything reverts to normal.

In the end, I have chosen an investment technique that suits me, which is exactly how you should choose yours.