WARNING TO INVESTORS.

Auckland Star, Volume LXIV, Issue 70, 24 March 1933, Page 4

WARNING TO INVESTORS.

Tlie chairman of the Investment Executive Trust of New Zealand, Limited, in his annual'report to debenture holders gave some valuable information to investors whose chief concern is the safety of their capital. He stated, inter alia: — Speculation and Guessing Displaced by Group Investing. "I think I am fully justified in saying that the Investment Executive Trust of New Zealand, Limited, has brought to investors in the Dominion a service which insures their investments against loss and also insures an adequate and continuous profit. "Its objects are to eliminate the hapi hazard 'hit or miss' methods of speculation, and to substitute a plan of group inventing, based on assets values, not necessarily Stock Exchange prices. The adoption of this plan in Great Britain came two generations ago, and it has since established itself as a sound method of protecting capital and income. In the light of experience, I am convinced that the vast majority of those with means, little or much, to invest can improve their financial positions by converting their existing investments into investment trust securities. There has been too much investing without a knowledge of scientific investment principles, which must be carefully examined and understood before there can be any assurance of capital safety and adequate income. "Intelligent selection requires the aid of the specialist. Tlic aggregate experience of the trust's specialists, supported by statistics, financial statements and records covering all phases of investment factors, extends over many years, and their knowledge is made available to intending or actual investors. Quotations Above Par on London Exchange. "I stated previously that investment trusts have been established for over 50 years in Great Britain, and arc now recognised as probably the safest medium for investing capital. Proof of this statement is evidenced by the fact that on the London Stock Exchange in December last 117 investment trust stocks and securities were quoted above par. many of them from 50 per cent to 100 per cent above their original price, and even at these prices the financial editor of a London journal, in a recent issue, referring to investment trusts, writes:—-'The benefits have been demonstrated in both good times and bad, and they have shown astonishing recuperative powers after periods of depression. In my opinion there are to-day excellent bargains to be found among investment trust stocks. I know of at least one trust stock which can be purchased at half its break-up worth.' Incidentally, he further states:—'Stockbrokers and banks, it is to be feared, sometimes advise against investment trust stocks on grounds of personal interest, for the investment trust stockholder is a permanent holder and the stockbroker earns his bread by frequent changes.' "I merely quote the statement so that intending investors may keep these words in mind when voluntary advice is offered to them."—(Ad.)