advantage of different securities (1)

from the standpoint of the investor , bond , preferred stocks , and common stock usually from a sequence of increasing risk and decreasing security-balanced by an increased chance of making high earning or capital gains. today, a"gilt-edge" bond may yield about 6 or 8 per cent, a good preferred stocks about the same. because common stocks may rise in value and give capital gains , they now often have a spread of dividend yields that begins even lower than bonds : some " growth stocks " like IBM yield in dividends much , ,much less than the safest government bonds . To test his understanding of these three forms of securities , the reader should make sure that he understands why common stocks tend to be better investment in time of sudden inflation than the other two .it would be mistake to leave the reader with the impression that bonds are perfectly safe investments. On the contrary , during depressions many companies went bankrupt and defaulted on their bonds , paying off only a few cents on the dollar .