The New Student's Reference Work/Investments

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Invest′ments. The money which is saved by individuals is generally invested in some enterprise by which it may at the same time be of some service and yield an increased return. The most common investment is in the banks; but in such a case it is not really the depositor but the banking company which makes the investment. The interest which the bank pays to the depositor is only a part of the return which the bank gains from its investments. These investments may be in such securities as house and land property; or in such industries as mining, railroads or manufactures. It is seldom that a private individual, except in the case of house and land property, controls the whole of the concern in which his money is invested. For the most part he buys some shares in such a concern. Most great railroad and mining companies and many manufacturing establishments are organized into joint-stock companies, from which one receives dividends or periodical payments out of the profits, if any, in proportion to the number of shares which one may hold. The stock of such companies is sometimes bought merely in the hope of selling at a profit if it should rise in value. This kind of speculation is not worthy of the name of investment. Probably the first and safest investment in most cases is one's own house and land.