This paper is not intended either to be an exhaustive treatise on investment department practice, or to give the student any assistance in examinations on investment policy. It is hoped, however, that it might engender an interesting discussion of points which a newcomer to an investment department will find useful, and it may give some background to examination reading. The paper is concerned only with investment in securities dealt in on the Stock Exchange.

The prime purpose of the Stock Exchange is to bring together buyer and seller of stocks and shares. In most Exchanges, including the provincial ones in this country, this meeting is made directly by the broker of the buyer finding the broker of the seller, or vice versa. In London a shop-keeping system exists with a number of firms of jobbers making prices in specialized sections of the market. For instance, three firms of jobbers will buy or sell insurance shares, and those same firms operate in three or four other sections of the market—one of them operates in bank, shipping, tea and hire-purchase shares.