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