The Investing Approach

Let us suppose that Mr. John Q. Citizen has a fair degree of protection for his family in the form of life insurance and is purchasing a home as well. Besides, he has accumulated additional funds, some of which he has set aside and earmarked for emergencies; the rest he wishes to invest in other media. There will be a number of factors he should investigate.

Too often such a person depends upon chance information, so-called "tips," in making such a decision. He must realize that if he applies his intelligence he will learn more, know more, have better judgment, and also find out those sources of information and guidance that are best able to serve him. Many financial officers, whose sole business is to assist others to the best of their ability, find that not a few clients adopt a "know-it-all" attitude and seemingly do not wish any additional assistance. What is needed is a certain amount of education in the field of finance and investment. This cannot be achieved in a few days or a week, or even a month, but requires long and patient study; however, it will pay off in the long run, far better than any hit-and-miss method.

Let us suppose that Mr. Citizen has been reading the financial pages of a newspaper and has some rather vague ideas of such things as safety, liquidity, and rate of return. His first mistake is likely to be to suppose that there is such a thing as an ideal investment, which will guarantee him highest safety, immediate liquidity, and a rather attractive rate of interest coupled with very promising growth possibilities. Where will he find this? Nowhere! If there were such a thing, all people would be fully invested in it, and all other forms of investment would languish and die from lack of patronage.