The Wilmington morning star., 1945-11-16
Rv ROGER w. BABSON

NEW YORK, Nov. 15-This col
urnn is no place to discuss invest
ing for profits. Stock market
profits are too risky for a reader
to strive for without competent
impartial advice. Readers are,
however, justified-even from a
safety point of view-in putting
part of their money in good DIV
idend-paying stocks listed on the
New York Exchange.
Interest rates on savings are
now very low. The best banks pay
only from one to two per cent. NO
interest is received on checking
accounts. Most good corporation
bonds yield much more than gov
eminent bonds. l do not care much
for preferred stocks unless they
are non-callable. This means that
if one has 81, 1000 to invest he would
do well to put $500 in Victory bonds
(rny cousin Paul T. Babson figures
the "E' U. S. bonds yield $3.50 per
cent and $500 in the capital stock
OF some good dividend-paying COM
pany listed on the New York Stock
Exchange.
AS an illustration, I mention the
following 80 companies which have
paid dividends every year for over
forty years:
American Telephone & Tel. Gut
ility); Borden Co. Good prodo;
Colg. -Palm.-P eet lsoap mfg;
Commonwealth Edison (utility);
Cont. Insurance dnsurance); Dla-
mond Match (misceD; Dow Chem.
ical Chem. Eastman Kod. misc);
General Electric (elec. equip;
ms. Co. N. Amer. Insurance.;
Kroger Grocery (ret. trade); Ma
tional Bisc. Good prod.); Norfolk
g. Western (railroadD; Otis Eleva-
tor (mchy. & ED; Parke, Davis
(drug prod); Penn. R. R. (rall-
road; Penn. Salt (miscel0; Pep
perell Mfg. (textile); Pfizer
(Chas.) (chemicaD; Phila. Elec.
(utility); Pitts. & L. Erie ORD;
Pitts. Pl. Glass (glass mfg;
Proctor & Gamble (soap mfg;
Pullman, Inc. Grail eq.); Sherwin-
Williams (paint & var0; Standard
Oil Ind. (oiD; Stand. Oil N. j.,
(oiD; Texas Co. (oiD; Union Pa
cific (railroa6; United Fruit food
prod.D; West Va. P. & P. (paper
mfg); Westinghouse Air Br. Grail,
equip.
The $500 above mentioned should,
however, be divided among five,
or perhaps ten, good stocks. Look
ing back over the forty years dur
ing which time l have invested
for clients probably several billion
dollars, 1 have been greatly i'm
pressed by the importance Of d.
versification. This means that you
should not put all your eggs in one
basket.
II you have good dividend-pay-
ing stocks, well diversified, and
}. invest whenever you have the
money, irrespective Of market
conditions, you should average up
well in the long run. In such a
case, however, you SHouIo LII Sct
all about booms and panics and
4 not be bothered about quotations
or what your friends say about
H the stock market. Buy stocks for
safety and yield.
H The most important feature OF
Il diversification is the proper dis
tribution of funds between invest
! ments which are fairly stable ir
their price action on the one hand
and those which historical expert
ence has taught us will prove
volatile in their price actions or
the other hand.
Generally speaking, advise
working along the lines Of reduc.
ing commitments in the railroad
coal, automobile, airplane manu-.
featuring and household appliance
industries. A careful scrutiny Of
the selling prices for many stocks
leads me to the conclusion that
prices are beginning to outrun
etsvs s's.s sess .