Market Watch

[Joemoney]

SEC Comments Submitted

I made the following comments on this proposed rule:

http://www.sec.gov/rules/proposed/33-8101.htm

I will inform this thread of when it is published on the SEC website (http://www.sec.gov/ )

Comments on Rule: S7-17-02 "Proposed Amendments to Investment Company Advertising Rules"

To the Securities and Exchange Commission,

It has come to my attention that you have proposed a rule/amendment regarding the SEC's policy towards advertising for investment companies. I personally, am glad that such a matter has come to your attention, especially in such a weary market. The fact that many, or perhaps all, investment companies lack the moral sense to disclose the details behind their performance is a problem which causes many people to be misled into services they would not otherwise be interested in, such as a high risk mutual fund.

A typical example of this would be an investment company advertising its mutual fund's 6 month performance from the date September 21, 2002 (post-9/11/02 low) to March 21, 2002. During this time period, the Nasdaq gained approximately 31%. For the sake of argument, we'll say that this mutual fund's gains ran parallel with the Nasdaq. The investment company would then go and advertise it's 6-month, 31% gain either on television, in print, or where ever else. The potential clients that would see this advertisement, would then be falsely informed and would not know that the performance advertised by the company was altered and such returns were not typical. The current disclosure used by most investment companies "Past performance is no indication of future results," is not enough and does not at all give details about the company's specific performance. My example may have been an extreme case of such deception, but nonetheless, is still a reasonable and realistic case. Other investment companies may not be as bold, but deception is deception, no matter how
extreme it is.

I personally, would like to see the SEC set a standard time period for advertising performance. For example, all investment companies would be required to only advertise their performance during an SEC approved time period, which the SEC believes is a balanced period that would reflect average returns in the stock market. This would defeat the altering of dates on investment time periods to improve market returns. An expert SEC panel would analyze the market to choose a proper time period that would be fair and average. Investment companies misleading investors should not at all be allowed.

I support your actions.

Thank You for your time,

Joseph M. Jaros Jr.
Investor
President/CEO of MarketReporter.com
& United States Citizen