Bonds work out, but Sara Lee no sweet deal
Dear Mr. Berko: I have $10,000 to invest and would like to buy a high-yielding preferred with an 11 percent or better yield that could increase in value as the company improves its earnings. I bought $10,000 face value of the 7.75 percent Lucent Convertible Bonds you recommend at $660 per bond with an 11.7 percent yield and I'd like to buy another high-yield security. What do you recommend? Also, I own 600 shares of Sara Lee, which I bought in 1999 at $27. It's done nothing but go down. Please tell me what you think. -- W.T., Springfield

Berko offers tips on TIPS
Dear Mr. Berko: My brother-in-law told me that you recommended he put 20 percent of his $505,000 ROTH IRA into TIPS. We are the same age, have identical ROTH IRAs, earn the same income with the same firm and have the same debts, and in fact, our families are the best of friends and we live three houses away.

TIPS sound part of portfolio
Dear Mr. Berko: My brother-in-law told me that you recommended he put 20 percent of his $505,000 Roth IRA into treasury inflation protected securities (TIPS). We are the same age, have identical Roth IRAs, earn the same income with the same firm and have the same debts, and in fact, our families are the best of friends and we live three houses away. I've enclosed a completed Investor Profile sent to me by your office and as you can see, I will also retire in 11 years. Would you recommend TIPS for me? And if so, why would you recommend TIPS instead of common stocks or mutual funds? E.D., Bend, Ore. Dear E.D: According to the Investor Profile you returned, I'd place 23 percent of your portfolio in TIPS and 67 percent of your portfolio in the following sectors: utilities, foreign infrastructure, natural resources, growth and income, emerging markets, small caps, bonds, gold and Asia/Far East. I believe that most portfolios are improperly managed if they do not contain TIPS. Finally, I'd invest the remaining 10 percent of your portfolio in a short-term, intermediate bond fund.

Don't fall for farce called National Gold Exchange
Dear Mr. Berko: I want to buy $6,000 worth of gold and have listened to and read about some of the exchanges that sell gold to the public like The National Gold Exchange that will sell me gold at wholesale. They said gold will go to $2,000 an ounce this year. I want to get the best price and my wife told me to write you because you may know of a selling group that offers the best price, even better than The National Gold Exchange. I would greatly appreciate your recommendation, because gold will double in the next year and I think this is a good opportunity to make a big score. -- W.F., Aurora

Don’t fall for gold exchange farce
Dear Mr. Berko: I want to buy $6,000 worth of gold and have listened to and read about some of the exchanges that sell gold to the public like The National Gold Exchange that will sell me gold at wholesale.

'Securitization' had nothing to do with security
Dear Mr. Berko: My broker has recommended that I buy (a) bond that he says ... is "securitized," which he says means the investment is secure. As you can see, it's a $100,000 face value bond that I can buy for $63,000 and pays an extremely high rate of interest, which really makes this very attractive. Do you think this is a good investment? Also, this broker had my sister buy 10,000 shares of General Motors stock at 81 cents per share. He says it's a good gamble and after the company is liquidated, these new shares could be worth a lot of money if GM becomes profitable again. I'd like your opinion on this, too. -- C.C., Moline

‘Securitization’ and GM investments
Malcom Berko: Dear Mr. Berko: My broker has recommended that I buy (a) bond that he says ... is "securitized," which he says means the investment is secure. As you can see, it's a $100,000 face value bond that I can buy for $63,000 and pays an extremely high rate of interest, which really makes this very attractive. Do you think this is a good investment?

Post-retirement CDs stiff seniors
Dear Mr. Berko: We've been depending on CDs for the last four years for safety and income. And we have been moving our CD money around at various banks to get the most income we can, especially when one bank offers a little more than another. This is becoming nerve-wracking and tiresome and in the last year or so, with rates now at 1.75 percent, we are hurting badly. We have $385,000 in CDs now that earn less than $8,000 a year, when a year ago, they were earning $17,000 in interest. That loss of $9,000 is hurtful to us. We are 72 and 74, respectively. I get a retirement check of $806 each month, plus $783 in pension income and I work part-time at Home Depot. My wife has a part-time job, too, in a chiropractor's office and gets about $400 in Social Security. It's difficult for us because we almost feel that we are living from hand to mouth when it comes time to pay our bills. If you have any ideas on how to increase our income safely, we would appreciate your thoughts. -- E.P., Oklahoma City