New-York tribune., 1921-11-08
Too Many Short Term Issues

Question-Because + regularly read oar
solutnn nave confidence in your juds
ment. ask your criticism OF my invest
inent position. am married and have four
children, one OF school age. others younger
My age is 81. 1 have made thirteen an
nqai MA payments against twenty payment
ss,ooO additional costs me- % per cent
more than the normal man. My income
from salary is $4,000. Bonuses are inde-
terminate but may amount TO $500 a year
or more A property bought two years
ago for Si2, 600 has against a mortgage OF
$s,oou This the owner has transferred to
Ihe mortgage is due May 1923. The prop
erty could probably be sold for 81 i 600
Because no provision for payment at IN
terest Periods is made and because I might
go elsewhere l am only paying the interest
at per cent, paying taxes and maintain
ing property, fully insured From sale Of
AOr1ner nome in inland city I have stan to
receive against principal 1880. with semi
annual interest payments at & per cent
THESE 5000 payments each six months I
have been combining with small savings
each ~, 700 Indianapolis Union Railway s.
year per cent, due February l. 1928
bought 81 9s, and $1,000 Humble oil and
Hennlng Company 2-year Z per cent. due
March II. 923, bought at 9slz Both are
caliahla at per cent and - 10 per cent
respectively above par These 7 n....
bought TO yield me over per cent because
| need pay less than g per cent on a
Judgment note OF IS. 900 in friendly hands
This last note prefer not TO pay off in
the next few years, ii ever In addition
/ maintain q respectable balance in my
checking account. have 81 400 in Lib
erfy bonds, bought al par and all con-
SiOp IN thirds, $500 in fourths and SlUu -.
a Victory as collateral for short-terrn
borrowings of my banker 10 carry me over
short times OF stress In my frenzied finance.
Coupons from Liberty bonds invested
in War Savings Stamps divided among the
children My Will appoints one OF your ad-
yertisers my executor. Should take ad-
vantage OF the bond rnarlt and convert the
1900 into longer term securities OF equal
marketahility? What would you recon-
mend instead, and for future investment
what type ~ security Should l rot carry
more insurance, say OF the term type
You VIII note that my method of saving
has been to get in debt and then slowly
Wlggle out.-A. 7. L.
Answer-We think that you would do
we'll to change your short-tern securi-
ties for long-term bonds While there
is chance that the bond market may
be lower than it Is now, on the other
hand, there is q chance that if the
European settlement was satisfactory
in the immediate future the price Of
bonds would gradually work up con-
siderably higher than it is now. For
your purposes, we would recommend
low coupon rate longterm bonds and
diversity the investment as you could
from time to time. We would buy
1000 bonds With the present $4,000
you could buy one Pacific Gas and
Electric general and refunding SIS, due
1912, recently selling at a21s; one
Bush Terminal Buildings first SIS, due
1860, recently selling at 77A, and one
Kansas City Southern first 3s, due 1850,
recently selling at 5S7s. The trouble
with your plan of getting into debt
and then wiggling out is that if some
unforeseen accident should take place,
severe and long continued illness in
the family. for instance, or money
panic, where it would be extremely
difficult to sell except at a large sacri-
fee, you might find yourself seriously
embarrassed We think, a sounder way
would be to get your debts paid out
then begin a course of regular invest
ment. We would not take term life
insurance if we were you, and as to
whether or rot $4,000 straight life IS
enough for you is question that you
would have to settle between your wife
and yourself.