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