With the growth of wealth we find increasing numbers of persons who
want to invest their means in good securities. To do this successfully
and safely is a very difficult question. It is even more difficult to
keep money profitably employed than to make it. Changes and
innovations are of continual occurrence. Not only are new securities
constantly coming upon the market, but new subjects as a basis of
their production are industriously sought after. Every newly
discovered force or process in mechanics means the appearance of
another detachment of paper securities. The War of the Rebellion
popularised the _coupon bond_, in consequence of its adoption by the
government, and made it the favourite form of investment paper.
Railroads and other corporations soon availed themselves of the
confidence which that species of paper inspired, and States, cities,
and counties were soon flooding the country with obligations carrying
long coupon attachments. Many persons have purchased and paid good
prices for mortgage coupon bonds, giving them no control over their
security, who would have rejected share certificates standing for an
equal interest in the property pledged and giving them the right to
participate in its management, with the possibility of a greater
return for their money. Many of the States through careless
legislation have permitted corporations to decide for themselves the
amounts of obligations they might put out, and the privilege has been
very much abused. We now have stocks and bonds upon the market
representing nearly all conceivable kinds of property--telegraph and
telephone companies, mining companies, cattle ranches, grain farms,
water-works, canals, bridges, oil- and gas-wells, electric lighting,
trolley companies, factories and mills, patent rights, steamboat
lines, apartment-houses, etc. Not only are properties of many kinds
used to issue bonds upon, but many kinds of bonds are often issued
upon the same properties. One issue of bonds is sometimes made the
basis of other issues. Some one has said that there never was a time
in the history of the world when it was so easy to invest money--and
to lose it. Of the securities that are offered with first-class
recommendations it is probable that about one third are actually good,
one third have some value, and one third are practically worthless. In
making investments the first and main thing to be studied is safety.
Never buy a security of any kind without having read it. Do not buy
what are commonly known as _cheap securities_. Do not rely solely upon
the advice of a broker; he may have personal interest to serve. By far
the greater number of losses to investors have been in securities
purchased exclusively on the recommendation of interested commission
men. It is a mistake to give preference to _listed_ securities--that
is, those reported on the stock-exchange lists. Stocks are too often
listed simply for speculative purposes, and the price represents not
so much the value of the property as the pitch of the speculation at
the time. Securities in the long run must stand upon their merits. As
a rule the best time for an experienced investor to buy is when others
are unloading.