Basic Considerations Before Investing

In order that any investment program shall be reasonably certain of success, there are a number of features that must be evaluated and considered. It is only natural that we consider them carefully, because the program itself must be tailored to the needs of the individual.

The first factor is the age of the individual investor. A man between twenty-five and thirty-five years of age would have an entirely different set of investment objectives from a man in his fifties. The younger man will look forward to the building of an estate throughout the years, as his earning power increases. He probably will be more interested in "growth" securities, while the older man may place great emphasis on safety and current income. Next would probably come the state of his health, since a lack of sound health would perhaps threaten to curtail his earnings, and this in turn might dictate a type of investment program which would emphasize safety of principal above all else.

The number of dependents and their requirements will certainly have a bearing upon the objectives to be attained by any program, since such matters as food, clothing, shelter, and general living standards will be reflected in the total family budget, and this in turn will relate to the total available funds. For example, Will Windowglass has a wife and three children, while Lawrence Lawnmower is married and has no children; it is quite apparent that the former will carry quite a sizable amount of life insurance in his over-all program, while the latter may find other forms of investment more attractive and more suited to his needs. Other things being equal, Will can scarcely match the total amount that Lawrence will have available for investment, since the latter has fewer family responsibilities.

The individual temperament of the investor is quite important. Some people worry about any risks, regardless of size; some worry about things that might happen and could cause disaster. Such persons should place their funds in investments that promise the highest degree of safety, such as good-quality bonds; they would never be happy otherwise. In the field of investment, as in all other cases where risks must be assumed, there is no place for the man who tortures himself when he takes them. Peace of mind is far more important!