New-York tribune., 1921-08-28

Choosing Rock or Rainbow
Questlon-Wnl you please give me an
from binding and loan stock this month";
1 woulI iiks high rate o. interest, say ! /
per cent. and am willing TO take a chance /
oohps, tnat is to say, I am not dependent /
upon the principal for my old age nor the
.H1e'es1 'or ny 'fnmediate needs, and
nos IN the habit of lying awake nights
Wnen my small holdings go below par /
.>eitner do consider myself fair game
ior wild cat schemes. though I have here
various rimes ! have had small blocks Of
Sn!ded states Steel common, for instance
oopsnl ooqstn at 60 sold at 100. with interest
coming most of the time. Perhap. [
would nave done better to stick TO pre-
ierreu i- s1ocks or bonds. My present hold
inss edont smile too broadly are 20
~ Pacinc OH at Is (rights). dividend $50
10 Atchlson. Topeka < Sante Fe common
-; baltimore Gas and Electric (e) at
:, sol o''iGena' - liberty bonds at par,
Si,727; dividend. $3.50 This gives me
about So per cent. as 7 figure it, though
~ mas market value of about 400 less
nan nan PAD 20 yon consider this foolish
put the Liberties and get on "A sound
oasis? would say that my husband has
Va 'ary OF st.oVo is a scientist doing re-
search. we have two young children and
VIII inherit someth ng over $4,000 for our
old age My husband carries $40. 900 life
ai's su'~ance ~ we put S4o0 a year into building
save two or taree hundred more by care
ful managern ~nt which goes into savings
oank and tnen buys some OF these poor
common stocks | mean by this to point
out that we have no training in buvinr or
selling stocks, that are goin, and VIII
ing 70 tfske business mans chance wait
for returns e necessary if we can ,na,re
lair turn over. but would like fair interest
ri,'[ nov II toss' be- To get back TO the begin
niDs What would you advise US to do with
lhis $4,000? have thoughts of American
lelephone end Telegraph, American Bank
Note' Cerro de Pasco SIS and some foreign
bonds Can YOU tell me anything of Mis-
sissipp River Power? was advised that
both the bonds and common stock ara
s0ga, s;"nar, ,l.l nour column has done real mis-
real lnterest.-Mrs. II. r. H
Answer-Your notions about finance
are good in the main but they need
clarifying, in our opinion. In the first
place, for you to put $500 into the
building and loan. 5000 or 5000 into
the bank and enough more into life
insurance to bring the total close to
si,OOO q year, means that you and YOUR
husband save about 25 per cent of
your income. We know somethino
about costs in a family of four and,
comolnlng that with an accidental ac-
qualntance with the living prices in the
charming town in which you dwell, we
consider that your management is not
only careful, as you say, but skillful
and sacrificing. The prospect of the
$4,000 legacy has not blurred your
vision of the future benefits and pres
ent satisfaction which are the result
and reward of present saving. Your
letter shows that every dollar you and
your husband put by means some
thing to you. And yet you calmly
make up your mind to speculate with
1T; an operation in which you put your
judgment Of prospects of future gains
IN princlpal against the estimate Of the
market place as>recorded from dav TO
day. You even throw in the naive ad-
mission that we have no training in
buying or selling stocks" 1t took
you more than eleven years to accu-
mulate the $4,000 which the building
ana loan association is paying you now.
and over that period it was invested
IN hrst mortgages on property that
you could see, if you Wished near YOUR
nome. Without asking you to be con
slstent Cor we agree with Emerson
that; consistency is the bugaboo Of
small mnds) We ask you to ponder
carefully whether you are warranted in
WeaHening your Investment position to
the extent Of demanding an per cent
yield and IN deliberately assuming the
rlsks OF loss which always are the con-
comltant of a chance for appreciation
Of what earthly use is it, for instance.
TOR you to hold Erie common stock
AS whole, your list shows you a cur
rent return of 5.6 per cent, certainly
nothing to be proud of on an income
oasls. Its speculative possibilities at
present are problematical Anything
we SAID about fhrro vuou1J $50,