Page:Hints About Investments (1926).pdf/263

 off as well as human foresight can fence, then the investor can spread his wings for more ambitious flights, and seek for a higher yield by means of judicious mixtures of less gilt-edged securities, and may aim at a probability of increase in income and in capital value as a set-off to the greater degree of risk that he now intends to run.

Increase in income joined with increase in capital value can only be secured for the investor by the purchase of ordinary (which may be called deferred) stocks and shares. Increase in capital value may be got by judicious jobbing in and out of fixed income securities, but that is the business of the speculator. Increase in capital value, that comes from increased taxing or earning power behind it, can be got, to a limited extent, from the debts of public bodies and companies that are bought at low prices because the taxable area or company is poor and unfortunate, and then rise in value because revenue and earning power improve; but increased capital value, such as is most refreshing to the investor, proceeds from a larger earning power which is his to receive in dividends or to see added to reserves to increase his future dividends; and this is only to be had from ordinary shares which make their holder a part proprietor and