The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1921-06-05
VS.. SPECULATION

dlfference between investment and /
speculation.
Speculation means taking chances: |
Running risks; subjecting your money |
10 perjls and hazards.
The history of speculation every
where is one Of a few big winners, a
humber of moderately successful win
ners, and a large majority Of losers.
Speculation is not an evil in itself.
IL there were no spectators there
would be no new oil wells, mines or
Inventions developed Every industry
must pass throug speculative stage
in the beginning. Certain enterprises
are by nature speculative, or uncertain,
at all times.
There is another kind of specula-
ton besides that leading toward use
full development This is the buying
Of certain securities on the market
with view of making quick profits
as the market prices Of securities go
up or down.
The latter kind of speculation is
usually defined in the public mind as
stock gambling" Nearly every one
has heard of the bulls" and bears"
II
sheared.
When the subject of investment is
brought up far too many people think
OF speculation and stock gambling.
They do not realize the big difference
between the latter and the habit oil
accommodating solid and substantial
wealth which pays the owner a good
return, year in and year out.
1t is always difficult to distinguish
between speculative propositions which
have some real chance OF making good
and fraudulent schemes. Shrewd bus
mess men are often fooled by clever
tricksters who never intend to make
an honest effort 10 carry out their
plans and promises. The legitimate
speculative enterprise and the fake us
ually look pretty much alike on their
face.
Investment does not consist Of plung-
ing, or taking chances.
It means putting your money away
safely SO that it yields steady and
sure return. 1t means letting your
capital work so that 1t receives good
wages and no penny Of 1t is ever lost
10 you, your family or your heirs.
The investor is not a gambler. He
provides for, the future and for H.
nancal independence in his old age
He does something Of which everyone
approves and which brings him the
blessings of his wife and children.
Everyone understands the value OF
life insurance. Life insurance Is III
no sense speculative. 1t is founded
on the law of averages, and nothing
can be more certain than this law
Whenever a man pays his life nsur
ance premium he makes a sound in
vestment-computed, Of course, upor
low rate Of return.
The investment merits OF savings
bank deposits are questioned by M
one Every depositor understands
that the bank pays him low rate o
interest for the use of his money
which it in turn loans for the use ol
business and industry at higher inter
- est rates an ID that savings banks car
" pay only low rate Of interest owint
TO the requirements Of safe banking
practice.
But until the Liberty Loan, tn
great fntJOrity Vi PeoPic III the Shi'N
= States were unfamiliar with the IN
vestment possibilities of bonds, an
still less familiar with the preferre'
stock of conservatively managed bus
mess organizations.
Up to the time of the First Libert.
Y Loan ii was said that there were no
to exceed 300 900 individuals in tn
country who regularly invested
III bonds
Now there are many millions
American men and women who nav
learned that a properly safeguarde
bond represents
% A mortgage on property and earn
ing power.
(2) A source of regular income to IN
owners.
90 Something which can be conver,
ed into cash by sale.
Cd A safe and easy way to put mol
ey to work at profit.
Preferred stock of weli-manage
business organization differs from n
above features Of bonds In that
% 1t Is not u mortgage. but Is
part ownership Of the proper'
and business.
(2) 1t usually yields larger annu'
income TO the owner.
Preferred stock pays the stockhold'
a fixed return, usually seven per cen
or 81 per 500 par value share, yeari
good corporation bond usually pa,
five per cent per 500 par sha
value yearly.
Money invested in boDds is loane
Money invested in preferred stock
put into the business organization
rect. A bondholder is u lender on
mortgage: stockholder Is partne
Payments to bondholders are made
the form OF interest; payments
stockholders are in the form VI din
dends.
Preferred shareholders are preferr
partners In the business. They sha
In the earnings ahead OF the holde
Of the common or ordinary stock.
BY thus dividing the stock into "
classes definite annual dividend pa
ments ON the preferred stock are 4
sured the investor.
A really sound investment Is o
that pays MI income to the owner
the security regularly AT stated !
RODS every year.
Certain kinds Of business cnterpris
ure able TO do this much better III
.thers.
Some lines Of business make unus
ally large profits In time OF prospect
and nothing In other periods.
other words the earnings have wi
degree OF fluctuation.