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Your recent editorial supported the Securities and Exchange Commission's (SEC) effort to find ways to rate mutual funds. This would be an effort to educate savers and investors concerning the risks of mutual fund investing. You supported this effort because many mutual fund investors have lost money by selecting inappropriate investments and by selling into a down market after holding for only a short time.

I disagree that for every perceived problem in society there is, or should be, a government solution, especially when an abundance of private industry solutions exist. We are not well-served to look to a government agency for investment counsel.

I am not convinced that such a "forward-looking yardstick" could be sufficiently reliable. Any such SEC gauge would create a false sense of security among unsophisticated investors who might come to rely on it for guidance. I find that there is seldom a "perfect investment" for anyone. More often than not, the "perfect investment" is a strategy that includes a blend of many investments, insurance products and legal documents, all acting as tools for accomplishing different aspects of a person's mixed bag of financial needs.

There are already a multitude of private industry sources of complete and detailed financial data on virtually all mutual funds. I agree that the information is sometimes difficult to decipher. This is not because the industry thrives on confusion, but because investments, taxes, economies and securities analysis are complicated. A SEC index will not change that. It could only obscure it.

Much of the problem you've described exists because of the proliferation of "adviserless" funds. Many mutual funds are purchased without the benefit of an experienced investment adviser, either directly from the fund companies or from new or inexperienced brokers. Your editorial actually demonstrates the need for licensed, capable investment advisers. Registered investment advisers can help an investor to select proper investments in the first place, make necessary adjustments along the way and maintain proper perspective during changing markets.

The solution is not for the SEC to tell us what fund to buy. Rather, it is for responsible adults to take advantage of the private industry research, information and counsel already available to them.

James A. Ferrin, CFP)-

Registered investment adviser -

Orem -