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Chapter I

The Investor's Ideal

Investment is the process by which we hand over money to somebody else expecting to receive an income, as a fee for the use of it, and to be able to get it back, if and when we want to do so. Whenever we invest we run a risk, which is infinitesimal if we are careful enough, but very real if we are rash or careless, of getting no income on our money and never seeing a farthing of it again. We are thus parting with funds which we could spend pleasantly in a hundred ways that our inclinations will suggest, and we do so because we decide that the pleasure of immediate spending is less important than the benefit of increased income in future and the possession of a store of wealth to be used in time of need or left to our dependents. To secure this benefit we take the risk that has been mentioned, and the ideal to be aimed at by the judicious investor