G
our illustration to its full possibility, we could
bave shown even a more calamitous loss than
£1,260 upon £6,109, the original capital
sum invested. So that, without in any way
straining our illustration, we are able to depict
a loss of rather more than 20 per cent,
upon three Trustee stocks, each of which
seemingly represents interests widely differing
from those influencing the other two.
Now, if so deplorable a result as this is
produced by the purchase of three stocks
which are supposed to represent all that is
most solid in English finance, it would seem
that there is just as much fluctuation in a
stock with a gilt edge as in a sound stock
not so adorned. Briefly, the tabular results
displayed above conclusively prove that
capital safety is not arrived at by merely
forming a combined Investment List of stocks
of unquestionable individual soundness. It
therefore follows that in order to achieve
stability of capital an Investment List must be
endowed with some other characteristic in addi
tion to the intrinsic merit of individual stocks,
if the investor is to ensure capital safety.
But before we begin the discussion of this
further requisite quality, let us first establish
the simple rudimentary principles which must
be the foundation of all successful investment.