IT'S ALWAYS SMART TO SAVE AND INVEST

If you're brand new to mutual fund investing, one of the most conservative ways to play this money game is by first investing in a money market mutual fund. There are hundreds of them around and many with low minimums of $250 or $500.

One of the beauties of money market mutual funds is that your money goes to work for you right away. And, similar to a savings account, money market mutual funds pay their shareholders interest. But, they pay much more interest than banks do on their passbook savings accounts by roughly 200 basis points. Or more.

For example, as of mid-July, the 7-day average yield on Vanguard's Treasury Money Market Mutual Fund, was 3.83 percent; on the T. Rowe Price US Treasury Money Market Fund it was 3,58 percent; and on the Gabelli US Treasury Money Market Fund, 3.4 percent, according to MoneyLetter, a Holliston, MA. financial publishing company. Those yields, by the way, are on the safest of the safe money market mutual funds--those that invest their assets into short-maturing Treasury securities.

If you're willing to take on a little more risk, you'll see yields go up a tad. The top-performing taxable general purpose money market mutual funds had yields over 4 percent, last month. For instance, the McM Principal Preservation Fund, had a 7-day yield of 4.05 percent; the Merrill Lynch CMA Money Fund's yield was 4.01 percent; and the Strong Investors Money Fund, 3,89 percent. When I checked how much my bank was paying on their passbook savings accounts, minimum investment requirement $200, it was 1.5 percent.

Another plus for money market mutual funds is that they can be used for a myriad of things from a spot to create a rainy days savings fund; to the fund in which you've stashed 6-month's to a year's worth of income to cover unexpected incidences ---like a layoff; to the fund you move your child's college education costs into before they head off to school; to a place to park cash while you're thinking of where to invest it next.

Become a shareholder in a money market mutual fund and shares are priced at $1 when both buying and liquidating them. So, you won't see any per shares changes in these funds, only differences in the yields paid to their shareholders.

For more information about money market mutual funds, check out imoneynet.com and moneyletter.com.

Now on to investing.

While money might be tight and managing it even tougher, once you've saved up enough of that green stuff to open a money market mutual fund, and, have disciplined yourself to keep feeding it, consider making some long-term investment plans.

Granted, most stock funds have had a pretty lousy performance year, but that's not entirely bad news. Particularly for the investor who is thinking about tomorrow.

Before going there, let's look at the numbers. According to Weiss Ratings of Palm Beach Gardens, FL, only 23 percent of stock funds had positive returns through the first half of this year. The biggest losers of the 11,000 funds that they track, were technology funds ---down on average 24.6 percent. Next came aggressive growth funds, off 13.5 percent.

Talk with the pros, however, and you'll learn that the time to buy stocks, or stock funds, is not when prices are soaring, but when they've fallen.

Because no one knows when markets will precisely hit their highs or their bottoms, investing $25, $50, or $100 each month into a stock fund that has a long and mostly positive track record, and a manager who has been at its helm for an extended period of time, month after month and year after year, can pay off over the long haul. That kind of investment strategy is called dollar-cost-averaging and it's the same one employed if you're participating in your company's 401(k) plan.

Most stock funds allow shareholders to participate in a dollar-cost-averaging program provided they invest a fixed amount each month and continue to do so until the fund's minimum investment requirement is met. That is, if a fund's minimum investment requirement is $2000, and their dollar-cost-averaging program's minimum investment is $25, you'll need to keep chucking $25 a month into your account until you've invested a total of $2000. After that marker has been passed, whether you want to keep investing each month or not is up to you. And yes, your money is buying shares of the fund each month you make an investment.

Bottom line, the market may be down, but that doesn't mean it'sout for the long-term investor.