The question often arises as to the advisability of investing money for a long or a short time. The best method to pursue depends very largely upon the financial condition existing at the time of the investment. During the early part of 1907 corporations found difficulty in selling new issues of bonds at normal prices. Consequently, they issued high rate notes running from one to three years, with the expectation that when they fell due the condition of the market would be such as to permit the refunding of these notes by the issue of long time low rate bonds in their stead. Other bonds of the same corporations were selling upon the market at extremely low figures. Yet what did the public do? Instead of buying the bonds, they bought the notes in preference, thereby enabling the corporations to profit out of the expected advance in the bonds to be issued later, rather than themselves seizing the opportunity with similar bonds then on the market.

From the above it is very easy to deduce this rule: Buy short time securities when prices are high and the net return consequently small, and buy long time securities when prices are low and the net return high. This is all based upon everything else being equal; that is, the safety of the security being supposed to be satisfactory.

Why do so many people buy a stock in some little known company with so little investigation? Such a person would not buy a small partnership interest in a business of long established reputation in his own neighborhood - one which he had every reason to believe prosperous - without the most minute investigation. But how does it differ from the other? The stock represents, to all practical purposes, his partnership in the incorporated company. Is there some hypnotic influence in the names " stocks " and " bonds "? Or is it the distance that lends enchantment? The " prophet is not without honour save in his own country," and so, perhaps, the investor believes not in his local industries, and, perforce, must seek afar for an outlet for his money, buying on the faith of some newspaper advertisement. By all this it is not meant that the seeker for an interest-bearing security should not make distant investments. Far from it, but either he should deal with a firm of untarnished and long-established reputation for fair dealings, or place his money near home in properties concerning which he has some certain knowledge. Choosing neither of these methods, then let him investigate with as great care as would the deacon in a horse trade. There are enough good investments regarding which full information may be had without wasting time over those of uncertain value, and facts regarding which are withheld from the searchlight of publicity.

At times a man - but more frequently a woman - says that there is a very small sum of money to live upon, and that it is extremely necessary to get as high a rate of interest as possible, consistent with safety. The conscientious banker often advises putting the money in some good savings bank, or buying what are known as high grade investment stocks or bonds returning from 5% to 5 1/2% interest. The customer will immediately say that he cannot possibly live on such a rate of interest, that he must have 7% or 8%. In spite of all arguing and urging upon the part of the banker he will in- . sist upon this interest rate. The former, against his better judgment, and contrary to his strong advice, will select, to the best of his knowledge and belief, a security that will return this desired rate of income with as little risk as possible, knowing, all the time, that no matter how earnestly he tries there is quite an element of risk. Finally, the investment is made; all goes serenely for months, perhaps years. The banker may do as well as he can to "keep track" of this investment, and often succeeds in persuading his customer to dispose of it in time to forestall a loss, and, possibly, in season to secure a profit. Frequently, in spite of his best endeavours, a loss will occur, and then his troubles begin. He will wish a dozen times that he had refused absolutely, in the beginning, to invest the money; at the time he may have requested the man not to invest it through him. The customer may have replied: " Please advise me; to whom else can I go for advice?" The latter is apt to remember very little of this. The banker is to blame from the other's point of view; he ought to have known that something was going to happen to this security, and sold it. He should have been more than human in his ability to foresee a loss; he has neglected his duty. There have been numerous cases where so little did the investor remember the conversation which took place at the time of making the investment, that he has heaped upon the banker the unjust accusation of having urged the purchase of the security.

In case of loss, let the investor assume his or her proportion of the responsibility and give proper credit to the banker in event of extraordinary profits.

Remember, always, that your investment banker is not infallible; for it is not possible for any human being to carry continually in his mind facts in relation to the multiplicity of securities handled by him. It is not to be expected that he constantly can be fully acquainted with every detail and ready, upon call, to decide upon the merits of any question raised by his clients. Especially, in times of financial panics, it is impossible for him to give many issues which have passed through his hands proper attention. It is natural that, occasionally, some one must err, and it is fair that the client should consider that he is only one among hundreds, perhaps thousands, of other clients that the banker has to consider.

In considering the advisability of selling a security, the original cost of it should not be given too serious consideration, especially if the cost were such as to show a loss. If it is a proper time to dispose of it, the cost should be left out of the question. Ask yourself whether or not you would buy at the present quotation, and if, for good reasons, you can decide in the negative, is it not a fair argument to sell? This does not mean that money is not often made by waiting, for all facts in relation to any particular security have to be taken into consideration in thinking of selling it as above indicated, but the mere fact that it costs more than you would give for it is no reason for delaying its sale.