Q. I am a 60 year old private practitioner ( psychotherapist).   In addition to my home and life insurances, I have assets, especially IRAs and a SEP IRA which are distributed as follows:

  12.5 percent in Mutual Discovery   15.5 percent in Acorn International   20.0 percent in MetLife Capital Appreciation   14.0 percent in Crabbe Huson Special Fund   15.0 percent in Fidelity Magellan   17.0 percent in Fidelity Contrafund    6.0 percent in Fidelity Asset Manager

Also, I have $41,000 in Fidelitys Variable Annuity distributed 20 percent in Equity Income; 20 percent Growth; 50 percent Overseas; and 10 percent Asset Manager.

In contrast to mine, my wife has only two IRAs: Fidelity Contrafund, and 20th Century Ultra.   I am beginning to feel that my choices are too spread out and aggressive for a person my age.   Do you think I should consolidate or leave them alone?

---B.P., Elk Grove Village, IL


A. That's quite a list. With the exception of the cash and bond holdings in Fidelity Asset Manager, however, you are virtually 100 percent invested in equities. So is your wife. This means your portfolio is subject to substantial risk because the volatility of stock prices is far higher than the volatility of most bond funds and cash.

One rule of thumb is that your equity holdings, as a percent of portfolio, should be reduced as you age: if you start 100 percent in stocks in your twenties, you should be 90 percent in your thirties, 80 percent in your forties, 70 percent in your fifties, and 60 percent in your sixties. Many would consider this too aggressive by 10 to 20 percent.

Action steps: reduce your equity holdings to about 60 percent by eliminating some of the redundant funds. You might also redeem your shares in Fidelity Asset Manager which is a mix of assets. Put the proceeds in a money market fund with the intention of moving to an intermediate bond fund as interest rates peak.

Many people invest in two many different funds; while there is some benefit from having funds with different STYLES of investing in the same asset class, eg. value versus growth investors or small versus large company investors, the performance differences between investment styles tend to disappear over time. The biggest decision for you to make is your "asset mix"--- the combination of stocks, bonds, and cash that is best for you--- and you need to own fewer stock funds.


Q. In August, 1993 we invested $50,000 in the Delaware Treasury Reserves International Fund.   The net asset value per share of the fund has fallen by more than $1 a share. Will you please tell us the rating on the Delaware Group?   Also, in your opinion, would it be wise to bail out now or take our losses or is there a chance that the Delaware Group might recover in the long run?

---H.B., Mercedes, TX


A. According to Morningstar, a Chicago firm that tracks mutual fund performance, the average rating for the 16 funds in the Delaware Group is 3.2 or very slightly above average. Your fund has a rating of 3, or average. In 1994 it performed in the 24 percentile of all government funds, meaning that it provided a better return than more than 7 out of 10 funds. Unfortunately, it's longer term record is not so good: the three year performance was in the 72 percentile, meaning nearly 7 in 10 government funds had provided a better performance.

Here are the total return figures over the period of your investment in three different investments:

               o Delaware Treasury Reserves International                 -0.89 percent                o General Government Funds                                                                 -1.92 percent                o 3 month U.S. Treasury bills                                                                +5.58 percent

It should be noted that these figures do not include sales commissions. As I have pointed out in many columns, savers who invest in fixed income funds and take the income have often found that the value of their total investment declines over time, sometimes alarmingly. Unless you are an experienced investor with other assets to invest, I suggest you redeem these shares and find an investment with less risk. If Delaware Group offered a fund with a shorter average maturity I would suggest that... but they don't.