10

profit  of  £10  over  the  second.  He  would  thus
he  £30  out  of  pocket  over  the  joint  transactions, ­
  and  his  capital  distribution  would  have
failed  in  its  object.  Whereas,  if  he  had
invested  £500  in  each  stock,  then  the  loss  on
the  first  stock  would  have  been  counterbalanced ­
  by  the  profit  on  the  second,  and  his
capital  distribution  would  have  proved  its
practical  utility.
Of  course,  the  point  might  be  raised  that
supposing  the  respective  movements  of  the
two  stocks  had  been  exactly  reversed,  and  the
£800  investment  had  risen  and  the  £200
investment  had  fallen,  in  such  a  case  the  very
irregularity  of  the  distribution  would  have
contributed  to  an  increase  of  profit.  But
this  result  of  an  unsound  investment  policy
in  no  way  disproves  the  fact  that  unsound
investment  policies  invariably  result  in  a  final
catastrophe.  Unequal  investment  of  this
nature,  where  the  result  is  left  to  chance,  is
nothing  more  than  speculation.  In  fact,  a  purchase ­
  of  securities  as  in  the  illustration  given
above  is  not  an  investment  at  all  ;  as  far  as
£600  of  it  is  concerned,  it  is  a  speculative  risk
against  which  no  provision  has  been  made.
The  main  object  of  sound  investment  is  to
safeguard  capital  against  loss,  and  this  object
can  only  be  attained  by  a  refusal  to  jeopardise