The Ypsilanti daily press. (Ypsilanti, Mich.) 1928-1962, 1945-02-16
By ROGER w. BABSON

bl lAObEh w. bADoO4M
Babson Park, Mass. Feb. 16-At
first thought IL would seem inn
possible to buy General Electric
or any other stock on u given day
for perhaps 20 per cent less than
its quotation in your daily newspa-
per. Yet there are times when this
can be done IL bought in conjunc-
ton with other good listed stocks
at the same time. To do this you
must buy the stock of an Invest
ment Trust. But first let me ex-
plain the difference between the
two groups OF Investment Trusts.
open-end Trusts
These Trusts are often limited
to owning certain group of Securi-
ties. Some of them buy only
bonds; others buy only listed
stocks which pay dividends; and
others confine themselves TO def
mite industries such as the rail
roads, or the utilities, or the in
dustrials. The total quantity OF Sc
curities which they hold may in
crease or decrease. according TO
the amount OF money the Trust OBJ
tains from or refunds to its share
holders: but the relationship be-
tween the securities held for invest
ment and the shares outstanding
usually is stable. In other words,
the managers OF the Trusts do not
exercise much discretion unless the
Trust Agreement specifically gives
them such.
When statesmen call upon you to
sell you some shares in an Invest
ment Trust, it usually is an Open
emu Trust. II you invest $4,000
the Trust uses this $4,000 in buy.
ing a diversified list OF stocks &C
cording to its charter. When you
sell your shares, you sell back to
the Trust. The Trust theoretical
" sells the proper portion OF Its
diversified list of holdings, and you
get approximately the current
value. In purchase or sale. or IN
both cases, you, the customer pay
loading charge" of from flve to
seven per cent to take care OF the
salesman's commissions, etc, and
the expenses OF routine business
and management are deducted be-
fore distributing dividends. These
Open-end Trusts are usually hon
estly run. and some provide excel
lent diversification Except as TO
managemenO but = you are will
ing to buy and take care OF your
own securities. combining yourselt
to a list selected by careful In
vestment Advisor. you should save
money by not botkering with an
Open-end Trust.
Close lend Trusts
These are Trusts with a definite
capitalization which does not
change when shares OF the Trust
are bought or sold by investors
When you buy the shares Of a
Closed-end Trust, you do not buy
them of the Trust but through
Stock Exchange from someone who
wants to sell. Similarly, you sell
the shores OF Closed-end Trust,
not back to the Trust. but through
a Stock Exchange where your brok-
eT mus SOIntOHt " Duy thcih'
This means you might lose money
when selling at a greater discount
from each shares asset value than
when you bought; but conversely,
you are likely to get some bargains
when buying such shares.
For instance, your broker could
give the names OF two or three
Investment Trusts with good man.
agements-where the market value
of the holdings is over 20 per cent
above the price which you would
need to pay for the stock OF the
Investment Trust. This means
that by buying such Trust stocks
you indirectly buy at big dis
count the stocks which 1t holds.
Why more people do not avail
themselves of these bargains Is be-
yond me.
S. {. C. Commended
tn goat of successful mature bust
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