78

Y.  Chance  of  fair  increase  in  Capital  Value
with  some  regard  for  Income.
An  investor  who  is  not  solely  dependent  on
the  income  derived  from  his  invested  capital,
and  who  is  in  a  position  to  accumulate  fresh
capital  from  time  to  time  out  of  earned  income,
should  pay  the  greatest  attention  to  a  possible  increase ­
  in  the  capital  value  of  his  stocks,  making
the  income-yield  a  subordinate  consideration.
There  are  quite  a  number  of  stocks  which,
like  Ground  Rents,  automatically  increase  in
capital  value,  such  as  Loans  and  Debentures,
redeemable  at  a  fixed  date  and  at  a  certain
fixed  price,  which  can  be  bought  below  their
redemption  value.  There  also  appear  on  the
market,  from  time  to  time,  new  Debentures
and  Bond  issues  which  are  thoroughly  well
secured  and  are  offered  below  the  value  which
they  are  likely  to  command  when  the  undertaking ­
  becomes  established.  There  are  many
Geographical  Divisions  in  which  industrial
development  is  fast  expanding,  and  in  which
the  current  rate  of  interest  paid  on  loans
displays  a  constant  tendency  to  diminish.
These  conditions  cause  a  gradual  appreciation
in  the  rise  of  all  sound  Stocks  in  such
divisions.  We  have  a  very  good  example
of  this  in  the  recent  development  of  Mexico,