Almost always, after we have discussed a problem with a friend, we think back and say to ourselves: “Why didn’t I add this, and this? How could I have overlooked that?” This chapter is the result of such questioning, as it were. We began with a “fireside chat.” Let us see what […]

SURVEY The investor in investment company shares is interested in institutional investing because he participates in such invest ment when he buys investment company shares. Secondly, institutional investing has an impact on prices and may influ ence the price, which he pays for his shares. Thirdly, institu tional investing affects and […]

INTRODUCTION This is a book about investment companies, not a book about investment. Nevertheless, I shall condense one man’s experi ence in this chapter and set forth some considerations on investment that I have developed out of many years of observa tion, activity, and reading. Understanding something about the nature of […]

The studies, which constitute this chapter, are presented as a source of concrete data on the origin, functioning, and record of several investment companies of different types. Obviously, space permits discussion of only a few among the companies in the field. Those chosen do not necessarily have the most out standing records, […]

POLICIES Investors should make sufficient allowance for differences in objectives when measuring the results or, as they are generally called, the “performance” of investment companies. The most obvious need is recognizing the distinction between common stock funds and balanced funds. The latter maintain a substan tial part (at least 35 per […]

REVIEW OF OBJECTIVES To illustrate differences in the objectives and investment poli cies of representative investment companies, statements con tained in prospectuses and other official material published by investment companies are cited. The Adams Express Company Under its Articles of Association, the company has very broad powers of investment […]

GENERAL SURVEY Open-end investment companies are now generally known as mutual funds, the terms being used interchangeably. Un doubtedly, the word mutual has sales value, for it is associated with savings banks and certain life insurance companies. In a number of ways, open-end companies are no more mutual than the ordinary […]

GENERAL SURVEY Closed-end investment companies differ from open-end com panies (mutual funds) in three important respects: 1. Closed-end companies do not constantly sell shares in order to raise additional money. As a rule, the capitalization of closed-end companies changes infrequently, if at all. 2. Prices of closed-end-company shares are […]

When Wall Street and Washington cooperate it is news indeed. It may be long before another industry so heartily endorses a regulatory measure and before both houses of Congress pass a similar proposal without a single negative vote. The Investment Company Act of 1940 was approved August 22 and became effective on […]

Some understanding of the early experience of investment com panies is necessary to show the reasons for federal regulation and its importance to investors. A few investment companies were organized in the United States before World War I. Although investment companies in the United Kingdom were well established, it must […]