Before investing in common stocks, one should be aware of both
their advantages and disadvantages. One advantage is their high potential return
on the (47) amount invested. The average price of all stocks
sold on the major stock (48) can be expected to rise
considerably over an (49) period of time; common stocks offer
an (50) hedge (防御措施) against long-term inflation.
Additionally, there are tax advantages to invest in common stocks. The income on
the capital gain of a common stock held for more than a year is taxed at a much
lower rate than ordinary income. The big disadvantage of common stocks is the
great risk of price (51) that must be accepted in return for
the chance to realize large gains. Both individual stocks and the market in
general (52) to sudden and steep price falling. These are
difficult for the small investors to (53) . Another
disadvantage is during periods of high inflation the attractiveness of other
forms of investment, such as time (54) , mortgages (抵押), and
bonds, reduce buyer interest in common stocks, resulting in price decrease.
Thus, during these times the value of common stocks as a hedge against inflation
is reduced. Often, too, the current rate of return on common stocks is much
lower than the return on the other less risky forms of investment. Although
these disadvantages cannot be (55) , they should not blind
investors to the advantages of the (56) chosen common
stocks. A) cautiously
F) decline
K) territory B)
extraordinary G)
attractive
L) plentifully C) deposits
H) exchanges
M)
deficiency D) anticipate
I) original
N) extensive
E) incline
J) ignored
O) demonstrate