Investment Funds

January 28, 1959

Report Outline
Gains for Democracy in Latin America
Growth of Pooled Investment Plans
Record of Fund Shares as Investments

Gains for Democracy in Latin America

Democratic Gains in Argentina and Colombia

Growth of mutual investment funds during the past decade has been spurred by a trend toward mass participation in the stock market without parallel since the boom of the late 1920s, The forces underlying the new movement, however, differ from those at work 30 years ago. Many individuals of small or moderate means took flyers in the market then in expectation of quick profits. Today's average-man purchaser of stocks is more of an investor than a speculator. He regularly puts a part of his savings into common stocks for the purpose of accumulating and safeguarding personal funds over a long-period.

The main factor responsible for entry of new investors into the stock market of late has been inflation. Belief that the purchasing power of the dollar will continue to decline is widespread. As a result, many people feel that the only way to protect the real value of their savings is to invest them in common stocks which, if wisely selected, may be expected to show a dollar appreciation equal to or in excess of any rise in the general price level. This form of investment, in contrast to investment in preferred stocks, bonds, or other fixed-income securities, accordingly has been gaining in popularity as a method of providing for future financial needs.

However, investment in common stocks, now as always, involves some degree of risk. Even if the market is headed for an over-all, long-term rise, there is no certainty that shares of a particular company will follow the upward trend. Amateur investors are rarely able to pick judiciously from 20,000 or more public issues available in the various exchanges and in over-the-counter markets. But a well-managed investment fund affords such investors a relatively safe way to get in position to participate in the financial gains produced by an expanding economy.

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