Investing In Forex Or Shares What Should Your Aim Be?

Summary: A question that a lot of investors ask is whether they should aim for capital appreciation or a nice dividend. With Forex this question does not arise as capital gain is the main objective. A fat dividend and a high yield which persuades investors that the stock has been undervalued may well create a small stampede that boosts the price and thereby reduces the yield to more conventional levels. It is also conceivable, however, that one could wait a discouragingly lon...

A question that a lot of investors ask is whether they should aim for capital appreciation or a nice dividend. With Forex this question does not arise as capital gain is the main objective. A fat dividend and a high yield which persuades investors that the stock has been undervalued may well create a small stampede that boosts the price and thereby reduces the yield to more conventional levels. It is also conceivable, however, that one could wait a discouragingly long time for Bethlehem and Youngstown to merge (the Government has frowned on the idea) or for Northern Pacific to make more from oil than from railroading. The big problem of the capital-appreciation man is that he is dealing in forecasts and predictions-and on a larger scale than his brother who simply wants to figure the chances that General Foods will continue its $2 dividend. There are indicators which make the task something more than guesswork, but it is difficult nonetheless. Corporation directors are notoriously close-mouthed about any action affecting the fundamental structure of their company; it is most unlikely that the average investor can inform himself and act fast enough to gain an edge in this area of capital gains. As for growth prospects, the field is wide open. But whether to pick an Ampex, a General Dynamics, or an Eastman Kodak is a puzzlement. Every large and successful company today was once small, and investors who got aboard during the rise profited handsomely. But which of the hundreds of small electronics firms will be the General Electric of tomorrow-and which will go by the boards, as did so many promising automobile companies a generation ago? (Anybody got a closing price on Pierce Arrow?) And what, considering the amazing versatility of our ever-growing large corporations, is Mighty Atom Instruments, Inc., likely to do that Westinghouse can't do better? Even assuming you have picked a winner, have you picked it early enough? The prices of many so-called growth stocks today already reflect the optimism of buyers, possibly beyond the ability of the companies to earn as anticipated. Remember, too, that in the rising market we have enjoyed for so many years, the real gain lies not in picking a merely successful company-the woods have been full of them-