Flight From Bonds to Stocks 207 
ing investment trusts, investment counsel and other 
skilled means of diversifying the use of their funds. 
Naturally this enlightened process has created a tre- 
mendous new market for securities that in times past 
have gone begging. With the increased demand, the 
price of these formerly despised securities has risen. 
Thus the change in the caution factor, reducing it 
to a much narrower margin from the true mathe- 
matical value of common stocks as their element of 
risk have been absorbed by intelligent diversification, 
has helped put the stock market on its higher plateau. 
[t constitutes a permanent reason why this plateau 
will not sink again to the level of former years except 
for extraordinary causes. 
Principle of Constant Scrutiny 
This is more certain because of another principle 
which may be added to that of diversification. It is 
the principle of constant inspection or check-up as to 
the status of companies issuing stocks, and constant 
turnover accordingly. Of course, bonds require less 
inspection than stocks; hence in times past when each 
man was his own investor, the busy man or the lazy 
man preferred bonds because he could put them in 
his safe-deposit box and forget them, while invest- 
ments in common stocks required unusual care and 
attention in the turnover of his funds—more than 
he was willing or able to give. 
For the sound investor in common stocks must 
turn them over constantly, selling those that are los- 
ing in value and investing in those that are gaining