8

In  such  a  case  as  the  above  the  investor
would  simply  sell  his  holding  of  stocks  and
re-invest  again  on  the  same  easy  and  safe
basis  from  which  he  started.  His  position
would  have  remained  unchanged,  and  his
unimpaired  £10,000  can  nearly  always  be
made  to  yield  per  cent.,  or  £450,  with  safety.
In  fact,  investment  lists,  whose  income  yield  is
less  than  4|-  per  cent.,  can,  save  under  exceptional ­
  conditions,  always  be  brought  np  to  a
4^  per  cent,  basis  without  disturbing  their
capital  safety  ;  indeed,  in  many  cases  the
capital  safety  can  be  increased.
But,  supposing  that  both  capital  and  income
had  dropped  20  per  cent.,  and  the  realisable
value  of  the  stocks  held  had  fallen  to  £8,000
and  the  income  to  £360,  then  the  case  would
be  serious  indeed.  To  produce  £450  per
annum  on  £8,000  necessitates  an  investment
which  yields  over  per  cent.,  and  to  make
up  the  capital  to  its  original  amount  means
dispensing  with  income  entirely  for  a  period
of  four  years  ;  both  of  which  are  unsatisfactory
contingencies.
The  position  which  we  have  here  illustrated
has  recently  arisen  in  the  case  of  some  of  the
finest  British  investments,  as  many  of  our
readers  are  unfortunately  aware  by  their  own
actual  experience  ;  we  will  therefore  not