Dear Mr. Berko:

I’m one of those many small investors. I’ve called four stock firms, and when they found out I only have $1,000 to invest, they didn’t want to talk to me. But I want some advice. Will you please help me?

I’m 49, have a small individual retirement account, $13,500 in my company 401(k) and $3,800 in a savings account yielding 1 percent. I want to earn more on my savings, but I don’t have enough money to buy $5,000 of those high-yield bond investments you recommended for much of last year.

Is there any way a small investor like me could invest $1,000 and get a 9 percent or 10 percent return without taking a huge risk? If so, could you help me invest at a higher interest rate? I’ve followed all of your high-yield recommendations for 2003 (those I could follow) and they seem to have done very well. Your help would be appreciated.

B.E., Oklahoma City

Dear B.E.:

First, you must know that locating high-yield paper in today’s market environment is like trying to find snowballs that won’t melt in hell.

Now, I can tell you with certainty that interest rates will move back up, but I can’t tell you when. As I have said before, interest rates will always do what they’re supposed to do, but never when they’re expected to. When interest rates do rise, I believe that an increase in rates will have less of a negative effect on the good, high-yield paper than on the low-yielding high-quality parchment.

You are certainly not going to get decent, personal investment advice from any of the big Wall Street firms in Oklahoma City or San Diego or Miami or Cleveland. The small investor is a pain, and the brokerage industry can’t earn money from small fries like you. In fact, most brokerages discourage your participation in the market through extremely high commission costs plus annual account fees that would choke a camel.

Anyhow, you deserve the best advice you can get, and I’m going to give you some of the best advice I’ve got. I’m sorry that you were treated so poorly by colleagues in Oklahoma City. I’ll go that extra mile for you because it pleases me to help you.

Take a peek at the BBB-rated 7.75 percent Qwest Communications International Inc. certificates (PKH-$22.40). This is a PreferredPlus Trust Series QWS-1 with an issue value and a par value of $25. The underlying securities are the 7.75 percent notes due Feb. 15, 2031, issued by Qwest Capital Funding, a subsidiary of Qwest Communications (Q-$4.31). PKH pays an annual dividend of $1.94 (7.75 percent times $25) and has a yield of 8.7 percent. The certificates are redeemable on or after Feb. 15, 2007, at the magnificent price of $25, which is a $2.60 premium to its current market value.

Now, I don’t care for Qwest’s common stock, and I have little good to say about the landline phone business, which I believe may go the way of the buggy whip. However, Qwest, a $16 billion telecommunication company that once was close to bankruptcy, is in recovery mode. New management has refinanced a good portion of its long-term debt, saving the company more than $200 million a year in interest costs. After losing about $21 billion during the past three years, there’s a plausible possibility that Qwest may turn a small profit next year and earn 5 cents a share.

Anyhow, as Qwest’s balance sheet continues to get stronger and as its telecommunications business improves in Colorado, Utah, the Dakotas, Arizona, Nebraska, Iowa, Washington, Wyoming, Oregon, and Minnesota, PKH could appreciate in value.

You can buy 50 shares for about $1,150, including commission, or you can buy 1,000 shares for about $22,500, including commission. This PreferredPlus investment pays twice annually: 97 cents per share on Feb. 15 and the same amount again on Aug. 15. Merrill Lynch issued the original offering in October 1991 and raised about $40 million.

The shares have modest liquidity and they trade on the Big Board with average daily volume of 6,000 to 10,000 shares a day. And if you want more information on this 7.75 percent Quest PreferredPlus investment, you can pull up the 112-page prospectus through the Securities and Exchange Commission’s EDGAR database. I’m comfortable recommending that you invest $1,150 of your $3,800 in savings here.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.