8 
number of stocks, but care must also be taken 
to select for the purpose stocks which are 
susceptible to as widely divergent influences 
as possible. 
So far we are afraid that we must appear 
to be rather gloomy counsellors with a tendency 
to harp upon disaster. But if an investor will 
only first safeguard himself against serious 
loss, the rest of his investment career presents 
no very great difficulties. There is, for 
instance, a bright side to the distribution of 
capital, because an investor would require to 
be exceptionally unfortunate if among the 
variety of securities which he held he did not 
possess some stocks which improved in capital 
value or in income-producing power, or in 
both. In fact, the whole system of splitting 
up capital, in the manner in which we advocate 
in this book, is based upon the selection of 
stocks in such a way that the resultant influence 
affecting them as a whole must tend to 
be a beneficial one. In other words, not 
only will the losses be counterbalanced by 
profits, but the profits will so outweigh 
the losses that the investor will steadily 
increase the realisable value of his Capital as 
time goes on ; and with the increase of Capital 
Account we have already shown that an 
improved Income follows as a matter of course.