New-York tribune., 1922-03-23
Investment Information

salary. am now subject to the income
tax to such an extent that a taS-iree
aecurity, such aa preferred stock netting
ule 6 per cent, pRya mo better thhn
bond paying Ga per cent. on which haYe
TO pay the tax.-M l..
Answer Your theory is n logical
one, but calls for conservative figuring.
This practice of purchasing bonds with
money borrowed in anticipation OF sure
income is one common TO wealthy SC
curity owners. Last fall and early
winter the riso in bonds was accclcr
atcd by just such buying as this, and
the fact that so many persons antici-
pated their January I interest RECIPES
explains why the "roinYestmcnt dc
mand." which so many persons had been
counting on as factor that would
produce rise in bonds early in Janu-
arv did not matcriaize. However, you
should Thin twice before committing
yourself TO 81 loan Of the exact amount
which you figure you can save during
the next year. Arrange matters so
that if you err at all it will be on the
side Of conservatism. The old adaGe
there is man va slip, etc." applies
in times like these more aptly than
under other conditions of trade and
finance. Any one following the practice
YOU have i'm mind should exercise Y
trcme caution in tho selection Of Sc
curities. Set out to buy good securi-
ties and pick nothing because it may
Weld you more than you will be pay
in interest to tire bank
Investment for $4,000
Ouestion--A friend Of mlnc. about seventy
four Years OF age, is deairous Of investing
TO the best adyanteEe both from the view
point Of return and Of safety. a sum Of
about $4,000, which comprises quite a
tl, rr1lf
Naturally he idea is to obtain reason
able rate OF income yearly for tho rest OF
his lIfc aud mt the same dime safety as to
principaL Your ideas as to IA diversified
list OF good bonds for such an Investment
of capital funds WIN be greatly appre-
ci2ted.--C. +. e.
Answcr-We feel that your friends
age aud circumstances call for the
selection Of bonds that will give tho
maximum Of direct current return and
not bonds whose yield includes a mate
rial appreciation Of principal through
redemption at par on the maturity date
Also he wants bonds OF fairly short
tcrm-that is, not much in excess Of
twenty years. With these things i'm
mind we would suggest the following
List Of bonds. (The return in each
case is the current return and not the
yield to maturity): 900 Union Pa
cific 6s 1898, return 5.22 per cent;
$4,000 Oregon-W ashington X, r. g. Nav.
as, 1861, return 5.13; $4,000 Illinois
Central 612s, 1884, return 5.55; $1,000
Northern PaciCc-Great Northern 6l2s,
1896, return Cos $1,000 Americal Tele-
phone and Telegraph 5s, 1896 return
30; $4,000 New York Telephone re-
funding 6s, 1941, return 5.85; $4,000
Montana Power 5s, l943, return 5.29;
- 600 General Electric debenture IS,
I94o return 5.T4; $4,000 Baldwin Loco
motive 5s, 1910, return 5; 81 900 Ameri-
can Smelling 5s, 1947, return 5.G3;
$1,000 American Thread 6s, 1928 return
$50; $4,000 United Kingdom of Great
Britain and Ireland 5I2s, 1887, return
$50; $1,000 Swedish Government IS,
1899, return 5.97; $1,000 City OF Copen-
hagen 12a, 1914, return 6.15 At cur
rent market prices these bonds would
cost, Approximately, $4,000. Your
friend can inceraSe or diminish The
amount Of any issue TO meet his re-
quirements for income, or if even
greater security is desired he might
consider Federal Land Bank Farm Loan
bonds yielding 4.50 to AIS per cent for
various maturties.