May We Recommend <i> Against</i> O.C. Municipal Bonds?

My grandpa, who lost just about everything he had in the Depression, wouldn’t believe it. My dad, whose idea of an investment tip was, “Never bet on a gray horse,” would be shocked. Shoot, it even sounds strange to me.

But someday soon, maybe as early as this week, I’m going to become an investor. Like Columbus, I’m setting sail for uncharted waters, unsure of what lies ahead.

I realize that to many adults, investing is no big deal. People in their mid-40s and beyond, either with college-bound kids or retirement plans on their minds, already understand the vagaries of the stock and bond markets or the world of mutual funds. They have begun planning for the future, because they have a conceptual understanding of what the future is.

I, on the other hand, can’t imagine being 65. The notion of being retired and not drawing income is as abstract a notion as signing a movie deal. But it has gradually sunk in that I had better start getting with the program, or I’ll be spending the bulk of my golden years eating tuna fish out of a can in my room at the YMCA.

My journey into the future began last week with a visit to a financial planner, recommended by friends. He is a very amiable guy, with 30 years in the business. He’s probably seen a lot of dopes show up in his office, which may explain why he didn’t chuckle when I told him my money was in a savings account drawing 2% interest.

As we talked, he wrote down some things. I couldn’t be sure, but I think one of them was: 2%--Ha! Ha! Ha! Ha!

I conceded right off the bat that I wasn’t sophisticated about money--a fact he perhaps already had gleaned from my having shown up in tennis shoes. He asked what my financial goals were, to which I replied: None.

Trying to flesh that out a little, I told him I had no house plans, no kids-in-college plans, no trip-of-a-lifetime plans, no early retirement dreams. Before long, we were both pretty depressed about my future. He began weeping, and I had to hand him a tissue before we could continue.

Eventually, he decided that mutual funds might be the ticket for me. That’s the way I’d been leaning in recent weeks, after friends advised me to get on the financial stick. I had read some money magazines but hadn’t felt so out of touch with the material since I last picked up a copy of Soldier of Fortune.

It’s mostly a language problem. Discounted cash flows, 12b-1 fees, asset-allocation funds, dollar cost averaging. . . . I felt like I was back in Latin class, translating Virgil. Adding to the discomfort is that page after page tells you how much money you would have made if you had only invested $10,000 10 years ago. I know they’re only trying to help, but between the lines I kept reading: “Too bad, sucker!”

The other thing that jumps out at the novice is the sheer number of mutual funds. If someone had asked me a few months ago how many mutual funds there were, I might have guessed 12 or 13 and certainly no more than 20. Would you believe more than 6,000, with about $2.5 trillion floating around in them? And we’ve got poverty in this country?

I quickly gave up on the magazines, which was good because it led me to my financial planner. We met briefly last week, and he gave me some reading material on a couple of funds he recommends. He asked me to read the prospectus on the funds, although I’m sure he was joking. But that’s my homework assignment for the week, and by the time I digest it and have taken the plunge in the next week or so, I suppose I’ll qualify as owning a piece of the rock.

No doubt, this will require registering Republican and joining the Rotary and displaying Old Glory on Flag Day, but so be it. Maybe it’s time for a change of life.

I don’t know if it’s just because I’m now “in the game” and taking notice for the first time, but it seems like there’s news everywhere about mutual funds. Unfortunately, much of what I read last week was about people expecting a market plunge sometime soon. Things have been going too well for too long, and a “correction” is possible, some experts say.

What a surprise. My best guess is that the plunge will occur within 24 to 48 hours of my initial investment.

Not to worry, my planner assured me. Even if that happens, things will be fine in the long run.

And that’s what this is all about, isn’t it? It’s all about the long view. About having enough for retirement. About buying into your country and investing in its future.

Count me in. I love my country, and if it’s got some extra money out there floating around for my retirement, I’d love to have some of it.

And next week, when I meet again with my planner, I only need to ask one more thing: his philosophy about betting on the gray.

Dana Parsons’ column appears Wednesday, Friday and Sunday.