Show I vS SPECULATIONS SPECULATIONS' 4 f 1 4 0 o I Difference Between Buying Bonds and Stocks Is Explained Speculation Essential in Development of Resources and Industries Bonds Are Safest By L. L S. S Trigg A A. PROMINENT Investment banker when asked aked the tho difference between I buying bonds and stocks Illustrated It In jn i this wise I It is just the difference between lending money to a company at ata a fixed rate rae of interest nad buying an Interest in the In InI Inthe the first instance you ou know Just what youre you're going to get lot tor or the tha I use of your money In the second secondS you share In tho the profit or losses You may get more or you may get nothing But But his questioner replied It better to have an Interest In the te tec c That may be nil al right the banker answered If It you know the business busies End and nd can afford a a. loss losa IHil I t HE His Ille Hil Illustration was was accurate and his expression apt apt Too many people fare afe e speculating who dont don't know the business and who cant can't afford to lose l d d the dJ distinction as drawn draw between bonds and stocks exemplifies very ver well wellI wel I the be difference between Investment and speculation generally I Speculation Not No Condemned 1 i should not ot be bo as condemning speculation In fact tact speculation specula specula- IS tion is S essential to development The merchant who buys a bill bU of ot goods I th the h ton men who x ho erect buildings and railroads even the farmer who plants plant his hla p are arc all an speculating If I no one bought stocks corporations could not be beS S c financed But Dut In the main this should be bo done by people who know what they hey are about and are aro ore willing to accept the risk risk 6 Nor should this be taken to mean that all al stocks are aro hazardous nor all al 1 bonds mortgages or other loans sate safe Stocks of ot some of ot the old established 1 bond Corporations are a safer investment than some bonds or mortgages They II will be found however to bo be bE soiling selling at prices to yield only a a reasonable rate i of ot wJ f return And as the tho bonds of at a a company are an obligation prior to the tho tock Stock ock it i is Js plain that the bonds of ot any anyone one company are a a safer Investment trian an n the stock of that same company It I follows likewise that the te bonds of f one ona company are tater Safer than ta the stock of another company of ot equal t standing anding I Man man Ma Saving for the te Future IE man who is saving for tor th the future as a a general rule will be better i ir i off oU to stick to tho business he ho understands and to lend his surplus money a ta a reasonable rato rate of Interest This rate changes the demand for and ande e supply a of ot monty money just as prices of other commodities are aro regulated and will b found to vary somewhat between different localities But nut whenever thea tho the a n ll attempts to get a greater return than the current curent rate interest for loans made on sound security ho very ver likely will have to sam I risk There are ire considerations other than security which affect t the price of consequent yield from Investments Chief among these aro are marketability L. L Duration tax exemption a and freedom from care cre These will wf be bo discussed In articles There is a a familiar maxim In Investment circles which I he C e investor will wi do wen well to keep In mind namely The Tho higher the tho rate rato the greater granter the te risk Aside Asie from the special considerations mentioned above above It I 11 a good Index to the hazard Involved In an Investment 1 I |