Page 8 Advertisements Column 3

Otago Daily Times, Issue 21994, 1 July 1933, Page 8

Investment Talks by “The Old Counsellor " No 13: Debentures —Thelt Advantages as compared with;—* I. Mortaases.— Assuming that mortgages are Issued under proper restrictions, they are a very desirable Investment from the stands colnt of safety. Their yield. In many Instances, Is similar to that of debentures of canal merit. They are. however, lacking In marketability and potential appreciation In It Is a difficult matter to sell a mortgage prior to maturity. Inasmuch as It Is necessary, where the mortgage has been purchased direct from the borrower, tor the new purchaser to go over all the procedure of the original buyer, that Is. assure himself of the conservatism of the appraisal, the validity of the title, the character of the mortgagor, and numerous other details—a responsibility which many investors are unwilling to assume. To other advantages of debentures may be added their prompt payment of Interest and principal, and contrasted with the occasional delays on mortgages, also Ihe more convenient denominations, and maturity of the debentures, permitting a selection of short- or long Investments lu large or small amounts. 2. Shares.—A shareholder Is a part owner of the business, whereas the debenture holder is a preferred creditor. Interest on debentures Is fixed and unchanging, and must be paid before any dividends are declared. Debentures are more stable In price, and, of course, are In a stronger position as to safety of principal. Over a period of years the average return of the debenture bolder will not Infrequently equal that of the shareholder without the assumption of the latter’s risks. The Old Counsellor The Securities Corporation (N.Z.) Limited, Public Trust Building, Dunedin. Telephone 11*777.