SPREAD AND 5 PER CENT.

A correspondent, whose wishes may be typical of those of many readers of these notes, asks whether it is possible, "without too much risk," to obtain a 5 per cent. income on a mixed investment of which one-half shall be in War Loan. Here is my solution of this conundrum :

Approximate Cost.

k500 War Loan .. ..

kzoo L.M.S. 4 p.c. First Pref... .. /zoo Southern Rly. Preferred .. ....., zoo Paterson, Laing & Bruce 6 p.c. First

Pref. .. .. .. .. .. 200 Platt Bros. Second Pref. .. Total Cost .. Annual Income.

515 135

•

£ 17 8 s. d.

I0 0

o o 142 0 0

125

12 0 0

78

7 o o £995 • • £54

10 0 I have spent rather less than £I,000—the unit of investment may be smaller or larger—and have obtained a total income of something over the stipulated £50, subject, of course, to income tax.

The risks ? Not, I think, very great on a reasonably long view, and I shall be disappointed if, on a short view, this group brings any dividend disappointments. This is not an investment policy for the safety-first man, but for the investor who, being determined to keep half his money in gilt-edged, is willing to venture with the balance in search of high income yield.