214 The Stock Market Crash—And After

1919 total. These figures also show, however, that
bonds are still the chief investment.

Common Stock Investment May Be Overdone
In an article published on May 28, 1928, I said
that while the theory is sound, investment in common
 stocks can be overdone, especially when every
one is buying them. The codperative buying of
diversified stock securities should be done with full
knowledge that it may be affected by overspeculation,
and that, after all, common stock investments are not
based on guaranteed income. When the average
yield of common stock falls below § per cent, the
investor must look very sharply at the prospects of
the companies in question, and then it is wise for him
to buy other securities as well.
The purchase of bonds and preferred stocks is
more advisable if the commodity price level tips
downward, as it has done since 1925. For when the
price level of commodities declines, holders of bonds
profit by the rise in purchasing power of the dollar,
both in their interest and in their principal.
Mr. Leland Rex Robinson, whose book on investment
 trusts is standard, recently called attention to
the generally high-grade character of securities purchased
 by leading investment trusts during 1929,
and the great distribution of risks which many of
them show in their holdings. Mr. Robinson distinguishes,
 of course, between investment trusts
proper and holding companies which control, manage
 and finance groups of subsidiaries. These hold-