| Whether you are investing in shares or Forex | | | | General Dynamics, builder of atomic |
| your main gains will be capital appreciation: | | | | submarines and Convair airplanes; |
| The investor in this category is not | | | | Owens-Corning Fiberglas, manufacturer of |
| interested in dividends but in seeing the | | | | insulation, filters and textiles, and glass |
| market price of his stock increase or one | | | | fiber boats, and Bendix Aviation, no infant, |
| currency improving against another. | | | | but investing heavily in diversification and |
| | | | new-product development. Dow and Minnesota |
| There are three advantages to this kind of | | | | Mining might also be grouped here, although |
| operation. First, if your judgment has been | | | | possibly by now they should be included among |
| good, you make more money faster than by | | | | the older companies Corning Glass, Goodrich, |
| relying on dividends. For example, the man | | | | Union Carbide, Westinghouse, National Lead, |
| who buys 100 shares at $30 and sells even at | | | | Minneapolis Honeywell, Eastman Kodak-whose |
| a 10-point profit has $1,000 (less | | | | youthful spirit and astonishing technological |
| commissions) to show for his year's work. | | | | resources have kept them in the forefront of |
| This represents nearly seven years' worth of | | | | American industry for years. |
| dividends from the $30 stock yielding a | | | | |
| conventional 5 per cent. | | | | All of these examples would qualify as growth |
| | | | stocks, as the kind of investment that would |
| Secondly, if you hold your investment for | | | | tempt the investor seeking capital |
| more than six months, your profit is | | | | appreciation. |
| considered a long-term capital gain, taxable | | | | |
| at a maximum 25 per cent rate for many | | | | But appreciation can also follow from subtle |
| people, a saving over straight-income rates. | | | | and complicated changes in a company's |
| | | | structure. In these cases, appreciation may |
| Finally, if your stock doesn't go up as | | | | have nothing to do with a new product or even |
| anticipated, there is always the chance that | | | | with the company's prospects within its |
| it will at least be a decent income-producer. | | | | industry. Rather it is the anticipated result |
| | | | of a merger, a spin-off (distribution of |
| This is something of a rationalization, of | | | | assets), a reorganization, or any one of a |
| course. There is no use pretending to be in | | | | number of procedures available to the complex |
| the capital-appreciation business if a little | | | | institution known as a corporation. |
| mess of dividends is all you have to show for | | | | |
| your efforts. The more consistent course is | | | | Talk of a merger between Bethlehem Steel and |
| to drop the non-producing stock (losses, if | | | | Youngstown Sheet & Tube made both stocks |
| any, are tax deductible) and shop around for | | | | interesting possibilities. U.S. Foil "B" |
| a winner. This, to be sure, takes guts. | | | | (American Stock Exchange), representing about |
| There's nothing like a couple of growth | | | | 48 per cent control of Reynolds Aluminum; |
| stocks that don't grow to take the steam out | | | | duPont, which is having to divest itself of |
| of a capital-appreciation man | | | | 63 million shares of General Motors stock; |
| | | | Northern Pacific Railway, which has important |
| On the other hand, the gloriously rising | | | | oil interests in the booming Williston Basin |
| market since World War II has simplified the | | | | of North Dakota; El Paso Natural Gas, which |
| task of discovering and getting aboard a | | | | has formed a subsidiary, Rare Metals Corp., |
| company with promising prospects. And, as | | | | for uranium exploration and processing; and |
| noted, an investor could wait five years for | | | | many others are examples of stocks with |
| his 10-point gain and still be ahead of the | | | | potential capital-gains features. |
| plugger piling up dividends. | | | | |
| | | | It is not possible to say exactly how or if |
| Capital appreciation, it should be noted, is | | | | the gains will be realized. Mergers require |
| an omnibus term covering any change or | | | | an adjustment of the stock prices of the |
| advance in a company's position which might | | | | participants which may benefit one or the |
| be reflected in the market price. It may mean | | | | other; or public interest in the prospects of |
| the emergence of a new company in a new | | | | the combined company may cause the stock to |
| industry, the coming of age of a speculative | | | | spurt. |
| youngster of a decade or two ago, or even new | | | | |
| evidence of vitality in anestablished | | | | An as yet undeveloped asset, such as Northern |
| veteran. | | | | Pacific's oil, or Inland Steel's Steep Rock |
| | | | iron interest in Ontario, might mean an |
| Recently for instance, the stock of Ampex, | | | | eventual bonanza which would be reflected in |
| Inc., a bright little California company | | | | stock prices or a capital distribution of |
| manufacturing top notch equipment for the | | | | cash or stock. Several years back, Andes |
| booming tape-recorder industry, has more than | | | | Copper, an Anaconda subsidiary operating in |
| doubled in value. | | | | Chile, made a capital distribution of $6 per |
| | | | share at a time when the stock's market price |
| Dozens of small companies dealing in | | | | was hovering between $12 and $15. |
| electronics, precision equipment, and other | | | | |
| fruits of current scientific research | | | | Most gains on Forex are capital gains, where |
| (Tracerlab, National Research, Beckman | | | | the currency trader is hoping for an increase |
| Instruments, etc.) are similarly attracting | | | | in the value of one currency against another. |
| attention and consequent jumps in price. | | | | Profits can be spectacular, but it is |
| | | | worthhaving good Forex software to prevent |
| Somewhat more established and riding crests | | | | large losses. |
| of speculative interest are such stocks as | | | | |