From: James Zewan
Sent: January 27, 2007
Subject: File No. S7-25-06

As a somewhat experienced investor who understands the value of diversification in investing and in having investments that are not highly correlated to equities, I am in favor of the SEC exploring ways for the average investor (and not just high net worth investors) to be able to at least modestly invest in hedge funds in the future.

It does not seem appropriate to me that average investors in the US should be denied the opportunity to invest in investments that are inversely correlated to the typical types of investments in stocks and bonds while those with high net wealth have such an opportunity. All of us need and should want to have freedom in selecting our portfolio investments.

Rather than denying some people from access to such investments, I believe the SEC should be developing ways to reasonably regulate and audit hedge funds and to make the available in limited ways, e.g. maybe a maximum small investment amount or percentage of a person's assets or liquid assets so that they would not have an inappropriately large amount invested in such investments. The SEC should be seeking to make hedge funds more like stock and bond mutual funds with appropriate safeguards and notifications and other regulations rather than making them off-limits to the majority of investors. Institutions have historically used such investments as hedge funds offer to balance their risks and guard against certain outcomes. As more and more Americans are being required to be responsible for their own pensions and retirements, they need the SEC to find ways to allow them access to the same kinds of appropriate investments that institutions and pension plan trustees have had access to over many many years. The SEC must, of course, find ways to regulate this so that unsuspecting, unsophisticated investors are not taken advantage of.

Thank you for your careful consideration of this matter.

James Zewan