Beginner investors were given the rundown last night on how to save for a comfortable future.

International telecommunications and Japanese funds were at the top of financial expert Mr. Andrew Doble's list of good investment opportunities.

Mr. Doble advises beginner investors to first save in a bank account a sum of money that can be used for emergency expenses. But once some cash has been put aside, they should then consider higher-risk investments, but he warned against investing in derivatives.

Mr. Doble, president of Ardent Investment Management Ltd., was speaking at the Bermuda Insurance Institute during the latest in a series of talks sponsored by the Bermuda branch of The Institute of Chartered Secretaries and Administrators in Canada. His subject was "Investing for the Beginner''.

Mr. Doble noted a bond was an interest-bearing loan, repayable at a certain date. And within the fixed-income category known as bonds there were many levels of risk.

"Government issues such as Gilts and Treasury Bonds are low risk and offer interest rates only marginally above a deposit account. Corporate issues are riskier, in that a company can go bankrupt, and junk bonds are riskiest, in that the companies are usually already bankrupt,'' he said.

"Investing in stocks and shares means owning a part of a company. The risk of owning stocks depends on the company, the industry sector in which it operates and the country in which it is located.

"Owning shares in General Motors is less risky than owning shares in Telefonos de Mexico. Both, however, tend to be more risky than bonds or cash.

Accordingly, the rewards of owning equity are usually higher.

"Derivatives encompass anything that is derived from a primary investment product...Now they cover virtually anything, from index futures to stock options to currency swaps. The main thing to remember when looking to invest in derivatives is don't. They are not worth the risk.'' Diversification was a significant reducer of risk, he said. One can spread their investment over more stocks, more countries and more industries so that upsets in one company, one country or one industry could be weathered by the entire portfolio. The mutual fund industry, comprising hundreds of companies that are offering thousands of funds to the public, uses such a strategy and have professional people tracking trends and developments.

Mr. Doble noted that a global balanced fund is useful to use as a core segment of the portfolio. But other funds could be used for individual investments.

"For example,'' he said, "The Japanese index was near 40,000 in 1990. Now its near 16,000. As the world's second largest stock exchange you think it must be undervalued. Put your next $2,000 in a Japanese fund. "The Mexican market has fallen from 2,500 to 1,500. Coupled with the Peso falling from $0.30 to $0.15 this means the market has fallen 70 percent in US$ terms. Given time, you think that it is bound to recover. However, it is a very small market so you decide to put your next $2,000 in a Latin American fund, rather than a pure Mexican fund.

"World demand for telecommunications is huge, and growing each year. The whole of China, South America and the former Soviet Union need to be rewired.

The US has one telephone line per person. China has one per person. Put your next $2,000 in a telecommunications fund.