Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: BUYING MUNICIPALS. 58. The previous chapters outlined some of the principal problems and kinds of assistance, statistical and advisory, that are met in the routine of bond buying. It is left to differentiate the problems and helps that apply to particular types of bonds. 59. The Ten Investment Elements. In the first place, we must come to some conclusions regarding the investment qualities we seek in examining the loans submitted for purchase. A careful survey of all possible excellences yields us ten elements for the ideal investment.1 Security of principal. Stability of income (or security of interest). A fair return. Marketability. "I ,, ..... , I Convertibility. Value as collateral. J Tax exemption. Freedom from care. Acceptable duration. Acceptable denomination. Possibility of appreciation. 60. Whether the possibility of appreciation is not purely a speculative quality may be open i The Elements of an Ideal Investment, Chapter III of The Principles of Bond Investment. to discussion, but otherwise the list is probably unquestionable and comprehensive. We may say then that if a bond house can obtain for its clients an issue with (1) principal reasonably secure, (2) interest payments regular and certain, (3) a fair return in income, (4) a fairly responsive market, (5) hypothe- cary value at the banks—an issue, (6) that is free from direct tax, and (7) requires merely semi-annual coupon clipping, and (8) matures after a satisfactory lapse of time, and (9) comes in convenient units of denomination (small for the frugal poor, and large for the rich, so as not to crowd the strong box), and (10) has as good a chance of appreciating as of depreciating when its qualities become more generally recognized—well, a bond house cannot furnish such an issu...