Platinum for your portfolio? Luster is there, but small investors should be careful.

Gold has its ``gold bugs.'' Silver once had the Hunt Brothers. So what does platinum have? Nothing, except a lot of happy investors who have watched the price of the metal soar more than $100 an ounce in a year. Now, rising demand and continuing strife in South Africa, platinum's largest producer, have also begun to catch the attention of ordinary investors who never before dabbled in any of the precious metals, let alone the lesser-known platinum.

Experts caution, however, that small investors will find that the price of platinum is more tightly controlled by professional traders and speculators than even stocks and bonds. Also, even though platinum prices have been climbing steadily, an unexpected event could bring on an even faster decline.

But for the immediate future, platinum prospects look bright.

``The long-term supply situation is poor,'' says Gail Levey, a metals analyst with Shearson Lehman Brothers. ``The long-term demand situation looks good.'' This supply-demand imbalance, while a problem for those who must use platinum, is a boon for anyone who owns the stuff, she says.

About 80 percent of the noncommunist world's platinum comes from South Africa. The only other major producer is the Soviet Union. Until the mid-1970s, platinum had a few industrial uses and was also used in jewelry, chiefly in Japan.

But in 1975, platinum came into heavy use by US auto manufacturers, which started using it in catalytic converters. In a few years, demand will be even heavier as European automakers begin phasing in the pollution-control devices for cars sold there in 1988. This could increase demand as much as a third, analysts say.

``It certainly is a growth industry,'' Ms. Levey adds. Last year demand in the Western world was about 2.5 million ounces, she estimates, a nearly 400 percent increase from 1982.

But as demand has increased, the supply picture has become darker. On Jan. 6, news of strikes and the firing of some 20,000 workers at South Africa's Impala Platinum Holdings Ltd. sent platinum futures prices up $15 an ounce, to $358.70. Gold, as it almost always does in a crisis, headed in the same direction. Since then, prices of both metals have dipped and jumped, but on Jan. 20 platinum was still ahead, at $371.50 an ounce, compared with $351 for gold. Similar gains have been reported in other metals, like copper and aluminum.

``The speculators are back in the metals markets,'' notes Jeffery Mosseri, senior vice-president at Goldsmith & Harris, a specialty research firm.

Recently, speculators and others have had another factor to watch. A joint venture of Chevron Resources, Manville Products, and LAC Minerals of Canada is about to open a platinum mine in the Beartooth Mountains of Montana. By 1987, the mine is expected to employ about 200 workers. Eventually, it could produce about 50,000 ounces of platinum a year, or about 5 percent of US demand.

But even that would not be enough to help US manufacturers, should racial strife in South Africa lead to a significant slowdown or even a temporary closing of platinum mines.

``It will take this operation a while to get going,'' says Robert Anderson, vice-chairman of the Golconda Investors Fund, which has about 3 percent of its assets in Impala and in Rustenberg Platinum Holdings, South Africa's largest platinum mining company. ``But even after that, the US would still be very dependent on South African platinum.''

If small investors are tempted to put themselves in this platinum picture, they should probably follow the same rules as for any precious metal: See it as an inflation hedge and keep its share of the portfolio small, say no more than 5 or 10 percent.

``I believe every investor, if they have built a retirement portfolio with an IRA [individual retirement account] or Keogh and then want to build an investment portfolio, could include a small portion of metals in that portfolio,'' says Jeffery Nichols, president of American Precious Metals Advisors of White Plains, N.Y.

``The point is not to make a killing but to diversify so your overall portfolio will maintain some of its value,'' he continues.

Two of the most common purchases for investing in platinum are ingots, which sell in 1- to 10-ounce sizes, or South African mining shares. The ingots, now selling at a premium of about $390 an ounce, are available through coin and metals dealers.

If you have more risk tolerance and don't mind investing in South Africa, you could try one of the mining companies. All trade in the United States as American depositary receipts. If there's a political or economic collapse in South Africa, these stocks could decline sharply. On the other hand, if the world economy continues to expand and the European catalytic converter installation takes place without trouble in the mines, the stock prices could jump. Recently, Impala sold for $10 a share, with Rustenberg at $9.50.

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