The basic characteristics of an investment portfolio are usually determined by the position and characteristics of the owner or owners. At one extreme we have had savings banks, life-insurance companies, and so-called legal trust funds. A generation ago their investments were limited by law in many states to high-grade bonds and, in some cases, high-grade preferred stocks. At the other extreme we have the well-to-do and experienced businessman, who will include any kind of bond or stock in his security list provided he considers it an attractive purchase.

It has been an old and sound principle that those who cannot afford to take risks should be content with a relatively low return ...

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