What Investment Means to You, in the Stock Market
It's all about how to make your money earn more money for you by investing it. If there were any certain way to do so, all the brokers in the world, the men who are supposed to know more than most people about the market, would be millionaires.
Needless to say, they're not.
Most people, if they have anything left at all after paying their bills, will think first of putting that extra money into a savings bank or into life insurance. Nobody could possibly quarrel with such a prudent course, because these forms of saving or investment are essential if a man is going to protect himself properly against the always unpredictable emergencies of life.
But today millions of people have come to regard securities--- stocks and bonds in all their varied forms--- as another equally good form of investment. Of course, there's a risk in buying stocks and bonds--- and for most people it's far bigger risk than it needs to be, because they've never taken the time to study securities or find out how to invest in them wisely.
But it should never be forgotten that there's risk in any form of investment.
There's a risk in just having money. Actually, it's a double-barreled risk. The one risk--- the risk that you might lose some of your money regardless of what you do with it--- is always evident. The other risk is never so apparent. And there's the risk that the money you save today may not be as much at some future time if prices of food and clothing and almost everything else continue to go up, as indeed they have, more or less steadily. The man who simply hoards his extra dollars--- puts them in a vault or buries them in the ground--- may avoid that first evident risk of losing any of them, but he can never sidestep the unseen risk, the risk of inflation.
So, every decision you make about what to do with your extra money should take into consideration those two kinds of risk--- the evident and the unseen. Naturally, too, you must also consider the return you hope to realize on your money. In most forms of investment the greater the return you try to get, the greater the risk, the evident risk, you must be prepared to take.
Over the years, the record shows that the average stock has paid a better return and provided a better balance of protection against the evident and unseen risks than any other form of investment. Not all of them have prospered all the time. But most of them have most of the time. Some have made millions, and some have gone broke, just as some companies have succeeded and some have failed.
