Is It Safe To Invest In Shares Or The Forex?

Summary: You feel yourself financially able and personally qualified to invest. You can meet the conditions of reasonable stability, reasonable flexibility, and reasonable caution. But nagging doubt remains. Wouldn't you really be better off with your extra cash in a savings account? Or a piece of real estate? In short, is it really safe to invest? Well, how much safety do you require? Since there are no absolutely sure things anywhere, safety must be looked at as a matter of de...

You feel yourself financially able and personally qualified to invest. You can meet the conditions of reasonable stability, reasonable flexibility, and reasonable caution. But nagging doubt remains. Wouldn't you really be better off with your extra cash in a savings account? Or a piece of real estate? In short, is it really safe to invest? Well, how much safety do you require? Since there are no absolutely sure things anywhere, safety must be looked at as a matter of degree. There are no guarantees of success in stock ownership, no guarantees against loss. Even the thoughtful, conscientious investor can be taken to the cleaners. It should be remembered, however, that investment in stocks is a way of sharing in the profit potential of American industry. Is the American economy safe? It seems to be. Since 1900 it has been rising in productivity at an average rate of 4 per cent per year. Our Gross National Product is now nearly $480 billion. By 1965, according to quite conservative estimates, it is expected to rise 30 per cent to some $535 billion. A few hard-headed stargazers among our economists feel it may go as high as $600 billion and perhaps to $700 billion by 1970. (In the early Thirties it was only $56 billion less than the 1959 Federal budget.) Should these peaks in fact be reached, or even approached, the likely result would be an unexampled level of national prosperity. For corporations, prosperity is reflected in earnings. For stockholders, it is reflected in a larger share of these earnings through increased dividends, or in capital gains a rise in the value of the stock hi the open market owing to the pressure of investors who anticipate further earnings by the corporation and wish to get aboard. This generally upward trend is, in fact, the course the market has taken in this century. [In only 29 years-from 1930 to the end of 1959-the value of stocks listed on the New York Stock Exchange has zoomed from $49 billion to more than $307 billion.] Of course, none of this means that the economy is impervious to setbacks or depressions. We have had them before and, chances are, we will have them again. An economy is a subtle and, to a considerable extent, still unknown combination of forces which produces prosperity only when a certain balance is maintained among them. Until all the factors establishing the balance are understood and controlled, dislocations can and will occur. It also follows that depression is pervasive. Stock values are a sensitive-and sometimes nervous-barometer of economic weather, but they are not the only gauge affected in times of stress. The bottom has been known to fall out of the real-estate market. And insurance companies and savings institutions, both of which invest heavily in real estate, mortgages, and securities to obtain the earnings they pay out in interest, cannot escape the consequences of a national depression either. In their pleasure at seeing banks raise their interest rate on savings to 3