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  addition ­
  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.