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Some reasons for buying funds and tips on which ones to choose

''I have found about 462 benefits of investing in mutual funds, but only about four that are really worth mentioning,'' says Gerald W. Perritt, president of Executive Information Services of Chicago. But those four are pretty strong arguments, adds Dr. Perritt, who is also former executive director of the American Association of Individual Investors (AAII).

Speaking at a recent dinner of the Boston-area AAII chapter, Perritt outlined the four main benefits of investing in mutual funds and listed a few general criteria he uses for selecting a fund.

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The four benefits, he says, are:

1. Instant diversification. ''To have a chance at winning the investment game , you must be in as many stocks as possible.'' Most investment advisers say people buying stocks should stick to about 10 or 15, which permits reasonable diversification while not giving an individual more securities than he can follow. A fund, on the other hand, can be invested in anywhere from 20 to 200 or more stocks.

2. Simplified record-keeping. Instead of several dividend checks, quarterly reports and statements, and many year-end tax documents, all this information is contained in one fund statement, although different statements do come throughout the year.

3. A high degree of liquidity. If you want to sell shares in a mutual fund, you can usually do so - to the degree you want - with a day's notice. ''But it may take several days or a few weeks to get in or out of the (stock) market when it's making a major move,'' Perritt says.

4. Professional management. People who work full time usually cannot keep close tabs on their stock portfolios. You can sometimes see people trying. They read the stock tables in the papers first thing in the morning, make quiet calls to their brokers, or excuse themselves for a little extra time over lunch. All this time, they're trying to keep in mind what their investment objectives are and trying to stick to them.

Perritt notes that a fund has full-time managers and a guide for defining its strategy that it cannot violate: the prospectus. ''It has to stick with this strategy through thick and thin,'' he points out.

Perritt's criteria for selecting a fund are somewhat general, but they may serve as a good takeoff point for newcomers:

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* The fund should not be too small. He prefers a fund to have at least $10 million in assets so it can take useful positions in a diverse portfolio of stocks.

* It should not be too large. An aggressive growth fund should not have more than $250 million in assets, Perritt believes, if it is to be able to move quickly in and out of companies and industries as circumstances change. For a more conservaitive growth-oriented fund, he would raise the limit to $400 million, but for bond or money-market funds, Perritt says, ''the bigger the better.'' He says these funds gain safety in diversification and the more money they have, the more diverse they can be.

* There should be plenty of shareholders. If there are too few shareholders, some may have disproportionately large amounts of the fund. Perritt likes to see at least 2,000 shareholders.

* ''I like concentration.'' The ideal number of stocks in a fund's portfolio, Perritt maintains, is 30 to 50, with perhaps a maximum of 70. More than that, he says, is too many and can lead to something he calls ''redundant diversification ,'' where a fund has stock in several companies doing the same thing and turning in about the same performance.

* ''I like mutual fund managers to make a decent living. This helps make them happy and enjoy what they're doing.'' The prospectus should tell how much the managers are paid.

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