Municipal bonds are those issued by states, cities and public agencies. The purposes of municipal bonds are familiar to every citizen. States issue bonds for highway construction, veterans’ pensions, institutional building, and conservation programs, to name just a few.

One of the simplest, most effective, and most popular methods of buying stock is to start a Monthly Investment Plan, or MIP. Instead of having the price of the stock desired determine the amount of money that must be invested, MIP permits the amount of money available for investment to determine the amount of stock bought.

If the investment club strikes you as an ideal answer to your needs and requirements, there are some additional tips to consider.

Do not attempt to form a club until you have investigated its status under Federal, state, and local laws. The Association of Stock Exchange Firms is attempting to win passage for a model statute that will simplify and clarify the status of investment clubs — and in some states is has already been enacted.

Your investment goals are necessarily a reflection of your temperament and personality and should be taken into consideration when considering investment options. Are your investment goals— and you—realistic? An overly cautious or conservative temperament may well react too slowly to changing conditions in the market, and thus miss out on opportunities.

Is the market safe? This question, still asked and still wondered about, assumes that there is something inherently perilous about a stock exchange. An exchange is simply an agency, a market where buyers and sellers can meet—through their brokers—to complete a transaction.

Your age, the state of your health, the number of dependents you support, the kind of job you have, whether you are a man or a woman, what kind of goals you have set for yourself—all these, and more, are demographic factors which will bear on your decision about whether to invest.

Like other clubs, investment clubs ordinarily meet once a month. Meeting less frequently than that slows activity to an unsatisfactory pace, more frequently places a greater demand on the members’ time than most are willing to sacrifice. Some clubs set the ante as high as $100 per month. The average club investment is about $260 a month.

No concerted organizational or promotional effort has created these clubs. In outline, a club’s members meet regularly, contribute funds equally, study investment possibilities carefully, and agree jointly on shares to be purchased or sold.

Essentially, it is an effort to predict a company’s potential earning power and, hence, the present value of its stock as an investment.

The investment analyst’s raw materials are statistics. He studies earnings reports, balance sheets, stock-market records, and the various ratios that can be derived from them. He considers the company’s long-term debt schedule, its expansion plans — contemplated or under way — and its tax position.

Opening an investment account is rather like opening a charge account at a department store. There are several kinds of accounts available to you. The basic one is the cash account, which establishes you as a bona fide customer able to buy or sell. Joint accounts may be opened by a husband and wife. Margin accounts are an extension of the cash account, which permits the customer to buy on margin.