c  2

17

even  in  the  case  of  the  most  prosperous  concerns, ­
  dividends  on  Ordinary  and  Deferred
capital  are  so  wholly  dependent  upon  the  good
or  bad  business  done  by  the  company  that
dividends  derived  from  capital  issues  of  this  sort
are  never  quite  free  from  a  taint  of  speculation.
So  that  investors  who  desire  to  receive  a  safe
and  regular  income  must  eschew  Ordinary  and
Deferred  stocks  entirely,  and  also  every  type
of  prior  charge  which  does  not  show  a  large
surplus  of  revenue  beyond  its  own  individual
dividend  requirements.  There  is  a  large
number  of  stocks  and  shares  known  on  the
London  Stock  Exchange  which  are  so  well
secured  from  an  income  point  of  view  as  to
practically  preclude  the  possibility  of  any
irregularity  or  reduction  in  dividend  payments. ­
  It  is  to  securities  of  this  class  that
every  investor,  who  aims  at  stability  of  income,
should  confine  himself.
It  is,  of  course,  possible  to  average  income
risks  by  splitting  up  the  capital  to  be  invested
amongst  a  number  of  securities  paying  large
dividends  and  by  setting  aside  a  part  of  this
large  income  annually  to  cover  possible  future
contingencies.  This  plan  is  followed  by  many
careful  investors,  who  thus  manage  to  make  a
large  and  fairly  stable  income.