What are the financial prospects for 2007?

As both a winner and a loser in the stock market over the last 40 years, I do not feel qualified to give strong advice along these lines. I can only list some of my positive and negative experiences and let you, my reader, make your own decisions on the subject.

Today, in January 2007, the stock market is over 12,000; gold is selling for approximately $615 per ounce and a barrel of crude oil is about $55. The mutual fund listings occupy more than a page in a full-sized newspaper. "You pays your money and you takes your choice."

When I made my first purchase of a mutual fund in 1959 there were very few listings in The N.Y. Times (maybe an eighth of a page). I was stationed in Fort Sam Houston in San Antonio and on my way to Korea when a Major Crabtree sold me a mutual fund. It was 8 percent front-loaded commission. I contracted to pay $100 a month for five years. No load funds had not been invented yet.

Fortunately, this turned out to be a wonderful investment. Over the next 40 years the fund went up and down but decidedly up. Albert Einstein once said, "Do not discount the power of compound interest." If left alone the money will grow and grow. I have not seen Major Crabtree in 40 years but I wish to thank him wherever he is. I hope he became a general.

Next, let me tell you about how I learned about options:

While waiting for a train I got into a conversation with a nice, polite gentleman. He was a stockbroker and in a short time he taught me about puts and calls. Since experience is the best teacher I started buying and selling options. Looking back and checking my financial records, I wish now that I had never met this gentleman.

During the late 1990s the stock market was running away with profits, especially in the technology field. Another stockbroker started calling me daily and beseeching me to give him some capital and he would double or triple it. The market was soaring skyward and he would do wonders for me. Because my tolerance is low I gave into his pleadings and badgerings.

The market turned south and soon my capital was one-fourth of my original amount. I had lost 75 percent of my initial investment. Within six months this broker was collecting unemployment insurance.

Some general rules of market investing:

1) Diversify.

2) Look carefully before you leap.

3) Be patient.

4) Don't be greedy.

Giving general principles is easy!

Putting them to use is the true answer!

Good luck!