Your Personality As An Investor Continued

Neither of the previous two examples is in any sense the true speculator whose main goal is a big, fast profit. He should not be held up as a pattern to copy, because he assumes rather substantial risks which are far greater than the average investor has any right to take. Such speculation is only for those of considerable means, for whom any given loss will represent but a small percentage of their total investment assets.

Which kind of investor are you? Excluding the pure speculator, you may be defensive or aggressive, or even a blend of the two. At any rate, it pays to analyze yourself from the point of view of this distinction and see, as we have remarked before, that all investment is not always such and may be diluted by a considerable measure of speculation. A frank, careful, and objective analysis is always in order and will pay off in the long run.

For the sake of argument, let us suppose that the foregoing discussions have indicated that a satisfactory investment program may be formulated for our Mr. Citizen. This may at the moment consist of a $1000 "rainy day fund" and an additional $1000 in U. S. Savings or other bonds. What of the next $1000? Should he place all of it in bonds? Should half be placed in an additional bond and the other half be used to make the initial purchase of a common stock? If he follows the latter procedure he would then have (aside from the "rainy day" amount) three quarters of his funds in fixed-dollar securities and the other quarter in stocks. Is this the best possible commitment? To give a straightforward and unqualified answer will require the consideration of still another matter which may have a strong influence upon this decision.