Arizona republican., 1922-06-05
BY 3. M. ANDERSON, JR, PHI. D.
Economist, Chase National Bank,
Nav, Nork

The small investor who tries to
make 10 per cent on his money is not
an investor. He is a speculator.
The agent who solicits the funds of
small investors promising them a re-
turn of 10, Is or 20 per cent or more
on sure investment is. conscious
~ or unconsciously, misrepresenting
facts. Sure investments paying 10
per cent or more are exceedingly un-
usual and, when genuine, are almost
never offered to the genral public.
1t is often we'll worth while for the
man who can afford to lose money to
take chances on speculative new pro-
motions. Industrial progress comes
as new enterprises are started. But
even the best planned new enter
priSes do not always make good, and
the small investor who cannot afford
to lose his money should not be called
upon to take these chances. More
over, a very high proportion of the
securities promising great returns
which are offered to the small in
vestor by solicitors are issued by un-
trained and over optimistic men,
while a very substantial number of
them are outright frauds.
Plenty Of Opportunities
The small investor need not lose
his money. He has plenty of oppor-
tunities which combine virtually alb
solute safety with substantial in
come.
The bonds of the United States
government and the bonds of virtual
ly all our states and better munich
palities may be bought, of course,
without hesitation. United States
government bonds can be bought in
denominations as small as $50 each.
There are, of course, savings banks
almost everywhere. well regulated
and dependable. There are local
savings and loan, or building and
loan, associations whose management
and trustworthiness the. small inyes-
tor can investigate for himself.
In most communities, and particu-
Iarly in the small communities, the
small investor has opportunities to
buy real estate mortgages where he
can personally inspect the properties
mortgaged, can personally inspect
the title to the land Tor have 1t in
vestigated at the borrowers expense
by competent experts), can person.
ally see to It that insurance premi-
ums and taxes on the property are
paid. and that proper repairs are
made.
Railroad Bonds
lHGTe are, UlOT6ONeI, a very large
number of railroad bonds and indus
trial bonds which bring a greater re-
turn than do the bonds of the United
States government, with practically
absolute safety. In choosing these
the small investor should consult his
local banker
To very large degree the bankers
of the United States have come to
realize that they have a public duty
in the matter of advising small in
vestors. The working woman with
a few hundred dollars to invest may
today come to the bond department
of great city bank with confidence
that she will receive a courteous re-
ception and painstaking, conscien-
tious advice.
Investors Desires
AS a general rule the investor
wishes three things G) absolute
safety, (2) as high yield as possible,
and go a marketable investment, that
is, one which he can quickly turn
into cash if he needs it.
These three things do not usually
go together. A bond which is abso-
lutely safe and instantly marketable
will not yield anything like so much
as stock with a narrow market and
with uncertain future earnings.
A real estate mortgage will yield
higher return than a highly market
able bond. because no matter how
safe. it is not likely that the holder
of the mortgage can quickly turn it
into cash in an emergency. Some