The Bridgeport times and evening farmer., 1919-01-25

a1 are designed 10 prOEDOt5 any ps]LL Many financial writer's accept with [ tt question the conclusion that there one class of security better than all thers, This position we believe to De faulty as 1t does not give adequate consideration to the requirements of the individual A saner course is to lay down "in row. as 1t were, and without preju- dice. the various groups of securities available for investment and after ex- amininE into the merits of each, the investor should select that best suited to the conditions
 These articles are not calculated to influence the reader in his selection of investment but rather to inform him how to choose securities advan- tageously.
 Security of Principal.
 This is the first and most import eire factor in investment: a high rate of interest or large dividends will not compensate for the loss of the sum invested.
 If 1t be established that the amount invested will be returned on demand, or at a pre-arranged date, or that the security purchased can be converted into equivalent value, at any time, then the principal must be considered secure. Except in the case of limit ed number of securities this cannot be determined with full certainty, and in these cases the income derived Is small. A certain element of risk !, I,,- +ta i,,xa In oJnndHt fair yield, yet this risk
 8 minimized by good judg- CTS PValue of the property under ;,, a security is the ultimate gauge he safety of the principal. The 1vpstor therefore should satisfy him self that this value Is ample to cover the security under consideration, un- less of course, he is prepared to ac- cept 10 hazard Involved in the de- velopInent of a new enterprise. In such cases he has tEe right to expect and demand a larger return for his money.
 Constancy of Income.
 Income from investments is usually in the form of interest or dividends.
 
 the borrower for the use of money and the lender receives a certificate showing the amount of the debt. This would be in the form of bond, note, debenturs or certificate of indebted ness Beyond the fixed rate of inter- est the lender has no share in the profits,
 Dividends arc paid on capital stock and represent profits, stockholder being fin truth one of the owners of the company and to the extent of his holdings shares in the results.
 Security of principal end constancy of income have no necessary relation as is generally believed. The security behind the investment may be worth many times the amount invested and vet for good reason the interest may at times be slow in payment or, in extreme cases, be suspended, in order 10 protect the principal.
 It Is a little known fact that default In the interest of most municipal bonds does not mature the principal. Bankruptcy proceedings cannot be taken against the government and in case of default the holder of state,
 
 await the time when funds can be provided for by the borrower, yet the strength and credit of the govern ment are behind these issues.
 In general the margin of profit through a series of years over and above the interest or dividend re- Quirements, Is the best guide in this matter. This margin should be ample to provide foQ '1ean' periods
 Productivity.
 Some writers put this feature un- der the name of Fair Income Re- turn" Product From Investment ' etc. but all W tn the uniform idea of indicating the amount to be received for placin~ money at work.
 It is generally admitted that al other conditions being equal, the in- come return varies inversely as the security. To explain: The stronger the protection to the principal the smaller the income from the invest rnent, while the weaker the security the greater the promise of profit.
 This condition does not always pre- prevail since as a matter of fact the protection offered by security behind liberal interest return is sometimes greater than that behind small inter. est. A municipal bond netting iron A:2j per cent. to 5 per cent. may no be so strong as an industr T bono mar