Benefits Of A Monthly Investment Plan
One of the simplest, most effective, and most popular methods of buying stock is to start a Monthly Investment Plan, or MIP. Started in 1954, the MIP now has more than 93,000 accounts in force, and new ones are being written at the rate of about 180 a day.

Learning To Factor Cost Of Living Into Your Investments
Are you old enough to remember the cost of food, clothing, and housing back in the 1930’s, the years before World War II? If so, you know that prices in the late 1950s are a great deal higher. If your memory does not go back that far, you had better find out what happened to the buying power of a dollar, especially between 1940 and 1950, before you select investments.

Mutual Funds: Tools for Diversification
Companies succeed and fail all the time—much like individuals do in their own careers. Putting all of one’s stock into one currently successful company can result in financial disaster, but in a diversified mutual fund, the past record of a company is a far better guide, for these reasons:

How Preferred Are Preferred Stocks?
In an attempt to combine the most attractive features of bonds and common stock, financial experts created preferred stock. In most cases, it pays more than a bond, but is safer than common stock because of its preferred position.

The Vassar Plan, although originally a moving average plan, changed so often while it was in use that it really fits in no single category, and was finally abandoned altogether. However, it was the first variable-ratio formula plan ever to receive wide publicity and is relatively simple in its principles.

The plan was conceived in 1938 at a time when investors were still mindful of the dismal market experiences of the 1929 and 1937 declines. To begin with, the plan was based on “the monthly mean price of the Dow-Jones Industrial Average for the years 1930-38,” which was 136.15.1 Therefore, 135 was taken as the median. The percentages of stocks and bonds to be held in the account were to be adjusted after each 10-point drop from this median, and after each 15-point rise.

Adjustments were made only if the market crossed an action point going away from the median, which is another way of saying that the halfway rule was to be followed: no purchases of stocks above the median, no sales below.

Keeping Your Investment Risk At A Minimum
No one likes to be told that in order to succeed he must put his nose to the grindstone, but that’s exactly what smart investors must do if they are to stand a chance of making a profit. An amateur, wanting to avoid gambling in stock, must do some studying.

Personal Opinion and Financial Decisions
Fundamentally, all market activity is in one way or another a response to the interaction of personal opinions. Someone wants to buy, someone wants to sell, and thereby a market is made.

The constant ratio formula is not a new formula. The first widely publicized use of the constant-ratio formula n the late 1930s was the “Yale Plan,” so-called because Yale University managed a part of its endowment fund according to the formula. The fund was started with stocks at 30 percent.

If the stocks held advanced to a point where their total value amounted to 40 percent of the total fund, they were cut back to 35 percent. If an advance in stocks again brought the figure up to 40 percent, stocks were to be cut back again to 35 percent. If the market declined at the beginning of the plan or otherwise to as low as 15 percent, they were to be brought up to 20 percent.

The plan was subsequently revised at various times to allow for more fluctuations in stock prices, but the principle remained essentially the same, and resembled somewhat the modified plan discussed above, where ratios are adjusted in order to take advantage of trends continuing in the same direction over a long period of time. Yale apparently had fairly satisfactory results with the plan, but has in recent years changed it to such an extent that the University can now be said to have all but abandoned the formula method.

Government Regulation And The Stock Market
In a bank that is a member of the Federal Deposit Insurance Corporation (F.D.I.C.), a depositor has a flat guarantee from the U.S. Government that he can always get his money back, and promptly. But in corporate stocks and bonds, the government guarantees nothing. The main effort of the S.E.C. is in the direction that anyone selling stocks or bonds must not conceal or omit important facts; he must make

Insider Hint: Brokers Are People Too
A stockbroker finds his customers mostly among that minority of investors already accustomed to owning stock; he cannot rapidly make converts from among investors acquainted only with fixed-price items. Somewhat the same condition exists in any other business, and is even worse in such fields as politics, religion, and art.