question that a lot of $2 dividend.
investors ask is whether
There are indicators which
they should aim for capital make the task something more than
appreciation or a nice dividend. guesswork, but it is difficult
With Forex this question does not nonetheless. Corporation
arise as capital gain is the main directors are notoriously
objective.
close-mouthed about any action
A fat dividend and a high affecting the fundamental
yield which persuades investors structure of their company; it is
that the stock has been most unlikely that the average
undervalued may well create a investor can inform himself and
small stampede that boosts the act fast enough to gain an edge
price and thereby reduces the in this area of capital
yield to more conventional gains.
levels.
As for growth prospects, the
It is also conceivable, field is wide open. But whether
however, that one could wait a to pick an Ampex, a General
discouragingly long time for Dynamics, or an Eastman Kodak is
Bethlehem and Youngstown to merge a puzzlement.
(the Government has frowned on
Every large and successful
the idea) or for Northern Pacific company today was once small, and
to make more from oil than from investors who got aboard during
railroading.
the rise profited handsomely. But
The big problem of the which of the hundreds of small
capital-appreciation man is that electronics firms will be the
he is dealing in forecasts and General Electric of tomorrow—and
predictions—and on a larger scale which will go by the boards, as
than his brother who simply wants did so many promising automobile
to figure the chances that companies a generation ago?
General Foods will continue its (Anybody got a closing price on
Pierce Arrow?) And what, due for a banner year.
considering the amazing
But for the new investor, even
versatility of our ever-growing the try for capital appreciation
large corporations, is Mighty is best done on a long-term
Atom Instruments, Inc., likely to basis. Satisfy yourself that your
do that Westinghouse can't do stock is not overpriced, then buy
better? Even assuming you have and give it a chance to
picked a winner, have you picked develop.
it early enough?
Safety of Principal:
The prices of many so-called Essentially, this means bonds.
growth stocks today already The investor who is willing to
reflect the optimism of buyers, forego a lively profit in the
possibly beyond the ability of form of dividends or capital
the companies to earn as appreciation can be interested
anticipated.
only in conserving the funds he
Remember, too, that in the has invested. This, customarily,
rising market we have enjoyed for is done by purchasing bonds which
so many years, the real gain lies are a debt of the issuing
not in picking a merely company, not a stake in its
successful company—the woods have earnings.
been full of them—• but one which
Bonds held to maturity will
outruns the market.
return their face amount to the
It has been done, and can be holder. And bond interest must be
done again. A bold investor who paid along the way whether this
has studied the market closely leaves anything for the
can pick up a temporarily stockholders or not. Interest is
depressed or unpopular stock at a paid at a fixed rate for a stated
good price and reap the benefits period of years; the rate usually
of a subsequent rise. Or he may, is between 2.5 and 4.5 per cent,
in fact, sniff out the company depending on the difficulty or
ease of obtaining money at the Categories E or F. They are the
time of issuance. Once it nits safest security anyone can buy.
the market, however, an They are noncallable; they are
attractive bond, like a good not subject to the flue-tuations
stock, is frequently bid up to of other securities and other
the point where the return is markets. (Corporate bonds are
considerably less than if it had inclined to slump when stock
been bought at par. prices are cheap and yields high,
Municipal bonds, issued by inclined to become expensive when
towns and cities to finance stocks are high and yields begin
schools, sewage systems, water to approach the levels
lines, and the like; state bonds customarily offered by
issued to finance a variety of bonds).
requirements; and public
Another point: corporate bonds
authority obligations, usually are usually issued in $1,000
involved in the construction and denominations, which places a
operation of toll highways or significant holding beyond the
bridges, are a category primarily reach of any but the wealthy or
of interest to the wealthy institutional investor.
investor seeking tax relief.
If you are a Forex investor
"Municipals," as all three are remember that as you are trying
loosely called, are tax-exempt. for a capital gain, this can Be
For the man in the 50 per cent risky and good Forex software
bracket this means as much income will help you reduce risks.
from a bond yielding 3 per cent
as from stocks earning 6.
Still and all, the new investor interested in bonds will type="text/javascript">
google_ad_format =
"728x15_0ads_al";
google_ad_channel = "3545651507"; type="text/javascript"
google_color_border =
"FFFFFF"; src="http://pagead2.googlesyndica
tion.com/pagead/show_ads.js">
google_color_bg = "FFFFFF";
google_color_link =
"0000FF";
