Personal Finance Q & A

Silver May Tarnish Your Portfolio

Q We have just read that financier Warren Buffett has been buying up silver. Is this a good time to invest money in a precious-metals mutual fund that has silver holdings?

- G.B., Seattle

A Silver prices have been on a rampage, jumping 40 percent since the middle of 1997. But whether the rally will continue is debatable; silver prices have dipped in recent days. Some metals experts think gains will be harder to come by in the months ahead.

But even if you assume that silver prices continue to rise, precious-metals funds may not be the best play for average investors, says Amy Granzin, an analyst at Morningstar Inc., a Chicago provider of information on mutual funds.

As a group, "precious-metals funds tend to be very high risk," Ms. Granzin says. Most have had a bumpy ride the past few years, with the group sagging badly in 1997. She sees few signs of an imminent breakout for the group on the up side. Gold tends to be the main component of these funds, and low inflation has dampened gold prices. "Precious-metals funds are really only appropriate for investors with a very well-diversified portfolio of mutual funds," she says.

The only primary silver fund that Ms. Granzin is aware of is the Lexington Strategic Silver Fund (800-526-0056). It is up 0.3 percent this year, but was down 7.3 percent in 1997.

So maybe it's best to leave silver to the sophisticated billionaires such as Mr. Buffett.

Q My husband and I are exploring the possibility of long-term care insurance for an older relative. But we're not quite sure where to start. Does anyone provide reliable information?

- H.T., Chicago

A Yes. Send a stamped, self-addressed envelop to the Health Insurance Association of America, at 555 13th St. N.W., Suite 600 East, Washington DC, 20004. Or call (202) 824-1600. The association will send you a free copy of the "Guide to Long-Term Care."

You can also contact the National Council on Aging, at (202) 479-1200. They also provide information.

If you're interested in coverage for home care or a private nursing home, make sure the plan has such options.

Questions about finances? Write:

Guy Halverson

The Christian Science Monitor

500 Fifth Ave., Suite 1845

New York, NY 10110

E-mail: halversong@csps.com