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