Subject: File No. S7-25-06
From: William Gryc
Affiliation: None

January 29, 2007

According to Modern Portfolio Theory, portfolio risk can be decreased by adding noncorrelated investment asset classes, even those that have high volatility. Many hedge funds are highly uncorrelated with the stock and bond markets. If high-net-worth individuals and institutions can reduce their portfolio risk by the use reasonable diversification into hedge funds, this risk reduction technique should be available to all investors.

Smaller net worth individuals can understand hedge fund strategies. If we assume that thay can understand the broad spectrum of risks associated with stocks, bonds, currencies, derivatives, etc., it is hypocritical to suggest they are incapable of understanding properly explained hedge fund strategies.

Furthermore, all investors should have the same choices as the rich. It simply is not the realm of a democratic government to limit individual choice on the basis of economic class. The government is wrong to suggest that net-worth is related to intelligence. Investment choices should be open to all willing and able investors, not just the rich.