New-York tribune., 1922-01-21
Guaranty Trust Stock

Guaranty Trust Stock
Question: own two shares Of COaran.y
Trust Company stock, orc at $40 cost
some years ago and ono a $3.50 a bout
a year ago. Which OF these things would
you advise FIRST. sell and take my loss
or second. hang on and trust for q future
rise to iny average cost figure OF s3s5
meantime getting only per cent return
or third. buy two more shares at $500 %
average my cost at 1892 each for four
shares. which would return trlhe over
per cent. bought originally as a con-
'ervat'yc buy, not for speculation. &c. w.
Answer: The statement of the Guar
anty Trust Company, published Janu-
airy 4, shows very considerable i'm .
prcvement over previous stateme ents,
but You must take into consideration
som ething besides the soundness of
the banks statement as showing the
condition Of the company as a bank.
You have your own financial problem
to consider. You have got to decide
for yourself whether you want to take
the chances involved of getting less in
come by following one course than an
other in the hope of getting more in
come AS you say, your return on your
investment now is only per cent.
down the cost, but your proposal at
least has the fact to recommend it that
1t would bring up your average income.
ordlnarlly the averaging down of price
IS suggested in nom dividend paving
stocks and amounts to throwing good
money after bad. Even in your case
however, it would mean that YOU would
deliberately make speculation. Even
were you to hold your stock, this would
be IN the nature of speculation about
which you would have to decide for
yourself We can simply state the fact
that the position of the company has
improved and also remind you of
fact which you already know. that is
snae no one can do anything more than
guess as to how rapid or how slow re-
covery NAV be. If you want to avoid
an eculation, your only sound course
IS TO follow your own first sugre stion
sell the stock and take your loss and
put your money into high-grad bond
instead of stock, to yield you about S
per cent You can get this rate with 8
nigh degree of safety under present
conditions. You might hold your Guar
,anty stock so long as to take a larger
loss when all considerations were
taken, that is. loss OF the difference be-
tween 3 and per cent and loss of
opportunity to buy high grade Sc
curities at price to yield 6 per cent.
than the loss involved in selling now.
The First Step
cuestion--I have been for some time
reader OF the investment information and
wish TO avail myself of your advice For
ah0ut ar S'Fht years have regularly invest
sa weekly savings in a building and loan
association in this vicinity the returns be-
.,s ao1ut = per cent. l have felt. how
in which to withdraw and purchase SONS me
sse' GOOD preferrsd stocks, as It appears to me
1nas 'nntn WITHIN hia. year or two they should be
r'ore normal. I have about 1880 to in
vssory Wet psha. ss9 nays wb,s, $500 in iseT: sna
Ing The var these. however. sT.1 l's expsct usct
to held I also intend TO al once star,
now now, about .s5oo per e sssr' 7 The s"'i list eS
Asou 0sf spee sSsnes sp Of puyns . oews
esn car ~ ssss1ssa'd 1sF
hning. and National Biscuit. I also have
considered Delaware & Hudson. which
seems good dividend paying road: how
II very often What are your ideas con-
c;erning &C., g,n IT? Also do you think an, taxi
think it advisable to purchase a good
bond? Frankly. as l look at the matter
. 90 not see much chance to realize a
market Is more active. and as the tend
ency seems to be upward at this time
am inclined to purchase the latter Look
Ing of the matter in another light would
not be just as we'll of to place the money
on good real estate mortgage IS on q
bond?-H. j. s.
Answer-Undoubtedly you do not re-
alze it, but in withdrawing your saw
ings from the building and loan as
sociation to buy preferred stocks, be-
cause in your opinion they are more
likely to advance in price than good
bonds, you are taking the first step in
specializing with your money. We
agree with you that the present is a
good time to purchase good preferred
stocks, but our reason for doing so is
not that we believe that in year or
two they will be selling for much
higher price but because we think that
there are certain preferred stocks the
dividends on which have been tried in
the fires of the recent depression and
dividends on which appear thoroughly
we'll secured. We also think, however
that this is a good time to buy high
grade bonds, and we suggest that You
make up your mind either to leave your
money with the building and loan as
sociation, drawing 5h per cent inter
est or else MT II into ,o.l