Various Methods Of Investing

The investor demands security first. Earning-power of the investment comes next; following this comes possible enhancement of value. A gambler is always willing ro take great risks. He is ready to "take a chance." Fortunes are always within his grasp, only to elude him at the last moment. The speculator is not so daring. He wants what he thinks is a reasonably "sure thing." With him Fortune is more or less fickle.

Theories Of Investing

There are three investment theories, each of which has many followers:

* Wide distribution of investment funds.
* Moderate distribution of investment funds.
* Placing all the funds in securities of one corporation.

Wide distribution more often than not results in actual loss on the principal, because of the natural tendency to always find "something different" at the expense of security.

Moderate distribution undoubtedly is the safest, for the reason that in a few well selected investments, the losses that might occur are usually more than offset by the gains in the other groups.

Placing all the funds in the securities of one corporation carries with it a certain element of risk, unless the corporation is old and well established, does a thriving business, and promptly meets all interest payments. Securities in such a corporation naturally command a high market price; therefore, the earnings are proportionately less.

Should the investor be unfortunate enough to invest his funds in a single corporation that later meets up with financial difficulties, the loss may be considerable - perhaps total.

Therefore, the consensus of opinion should seem to indicate that moderate distribution is safest in the long run.

Adopting A Safe Policy

In fact, the new investor will do well to adopt the policy of those who invest large sums frequently. The experienced trader, the big investor, and large corporations, put their money in group investments, as it combines market profit-possibilities of a prospective or non-dividend-payer, with a conservative dividend-paying stock. It is the insurance policy of the stock market, and a good one for the investor to adopt.

Increasing Profit-Possibilities

By making group investments, the investor is distributing his risk according to sound trading rules. He also stands the best chance of making a profit on the market value of his securities; and at the same time, insures a higher degree of safety of the principal - in addition to the carning-capacity of the securities.

Equalizing Values

Group investments, intelligently carried out, equalize conditions in various parts of the country that may affect the market price or yield of securities-Some investments in the group may increase considerably in value and earnings, while others may show a decline both in market value and productive capacity. For this reason, it should be clear to the reader that even under the most adverse conditions, protection to principal is thus better safeguarded, and a good rate of earnings on the investment is assured.

sell or buy - Tips and Advice

The Principles Of Profitable Investing

sell or buy - Tips and Advice

The Principles Of Profitable Investing

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