The advantages to be gained by sidetracking investment in stocks and shares through the medium of shares in investment trusts and " holding " companies, or in Fixed-Trust subunits, are apt to be exaggerated Those who favour this form of indirect investment do so on the ground that they participate in a widespread of sound securities, thereby avoiding the danger of putting their eggs in a limited number of baskets. This argument, however, is often somewhat weak. since one might just as well buy direct the best holdings of a trust, without participating in its worst.
Added to this, the dividend return obtainable from second-hand investment is necessarily less, as the dividends received by the trust are subject to the deduction of operating expenses and income-tax.
Although indirect investment is undoubtedly convenient for those who, from time to time. have small sums available to put aside. there is nothing to prevent anyone from creating their own investment units by the direct employment of round sums of £25, £50 or £100. Many people of small means are deterred from approaching the Stock Exchange for this purpose, because they believe that small sums are
not entertained. This is not so; a good broker is just as anxious to give attention to the investment of £25 as £1,000.