Stock market trading – In recent years, few investment companies have gone all out, i.

e., have not at any time sold 50 per cent or more of their common stocks and bought short-term obligations. The best single index of investment company portfolio policy with respect to the withdrawal from, and return of, funds into common stocks to take advantage of market fluctuations is the change in the ratio of cash and equivalent (short-term obligations) to other assets. Table 13 shows the movement of such a ratio for a group of closed-end companies. One of the "dangers" of selling a large part of the common stocks out of a portfolio with the hope of replacing them later on at lower prices is the attitude of stockholders, and in the case of open-end companies, potential buyers. Should the market continue to rise for six months or a year while the fund had a large cash position, the quarterly reports would present a poor comparison with other funds that had maintained a more fully invested position in common stocks.

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