sketched for the investor of securing from his investments an increasing income and growing capital value?
Shall we be justified by it in selling all the gilt-edged securities that we hold, putting the proceeds into ordinary stocks and shares representing ownership in industry, commerce, transport and agriculture, and expecting the Board of our companies to do the trick for us by steady additions to reserves which will put compound interest on our side?
It should be noted that Mr. Smith suggests (p. 104) that the annual excess income from stocks should be treated "as a genuine reserve against the supposed risk of holding common stocks." He proposes to grant the investor only the right to spend the amount that he would have received from an investment in bonds, and to make him reinvest the annual surplus income from stocks each year as he receives it. But how many ordinary investors—could be trusted to carry out this policy, or even, if the necessary self-control were present, to make all the calculations and adjustments that would be required?
But apart from this after-thought, we have to remember that the industrial risk which is inseparable from an investment in any particular industry cannot be eliminated by the
