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Investment of Your Capital or Leveraged Loan

 

We will talk about Segregated (Seg) Funds, Term Accounts (Term Deposits) and Universal Life within the context of investments. Always remember that although the internet, websites and newsletters can be a good source of information, none of these sources are a substitute for consulting with a financial advisor.

 

Leveraged Investment Loans

Talk to me about Leveraged Investment Loans of up to $250,000 available from Life Insurance companies. Ideal for individuals who have maximized their RRSP's or want Non-registered investments. 

 

  • Quick Approvals $10,000 to $100,000
  • Investment in Segregated Funds
  • Death Benefit Guarantee
  • Maturity Value Guarantee
  • No Margin Calls
  • Principal and Interest Payments
  • Interest Only Payment Option
  • Tax Deductible Interest Expense

 

 

 

Segregated Funds (Seg. Funds)

 

More individuals have some knowledge or at least an awareness of Mutual Funds versus Segregated (Seg.)Funds. A good way to describe Seg. Funds is to say they are very similar to mutual funds with the notable exception of being an insurance contract with death benefit and maturity value guarantees provided through an insurance wrapper. These guarantees will vary slightly from one insurance company to another and in some instances will vary from one type of contract to another within the same insurance company. Death Benefit guarantees are 75% in some instances, 100% in other instances and a couple companies have an added 4% annual escalator. Market value guarantees are usually based on a ten year horizon and again some are 100% most are 75%. Many companies allow you to reset your guaranteed maturity value and establish a new ten year horizon. You will appreciate, this is a great way to lock in higher vales in good markets. Naturally there is a cost for these guarantees and that cost comes in the form of slightly higher management fees usually expressed as Management Expense Ratios (MERs).

 

Barrington C. Mullings (905) 826-8138 or (416) 523-3256

 

Seg. Funds just like Mutual funds offer great opportunities and relative ease to create and manage a diversified investment portfolio to match your Investor Profile. The guarantees that come with Seg. Funds provide some peace of mind for preservation of your initial capital investment. The ability to reset guaranteed values and lock-in the increase in market values from time to time is a great feature and gives some investors the confidence to invest in funds with a little higher risk for the potential return of greater gains on those investments.

 

The net asset value of a fund represents the total market value of all the assets of the fund minus its liabilities. This net asset value when divided by the number of units held by investors is equal the net asset value per unit. These unit values are calculated at the close of business on every valuation date which is generally each day. When an investor deposits additional money they are allocated a number of units based on the amount of their investment divided by the net asset value per unit. The net asset value of a Segregated Fund fluctuates with market value of the underlying assets making up the specific Segregated Fund.

 

Term Accounts (Term Deposits), GIA's (GIC's)

 

These are your Term Deposits (TD), also known as Guaranteed Interest Accounts (GIA),  based on current fixed interest rates for a fixed length of time, such as 1, 2, 5, 10 years and so on, where the specified amount, term and rates are guaranteed. Rates do vary slightly based on whether the account is cashable or non-cashable and also from one financial institution to another..

 

The Guarnteed Interest Account / Term Deposit rates at their current low levels are not very appealing to many investors but there is the guarantee of the safety of their principal / capital. The Stock Markets, Mutual Funds and other kinds of investments, offer the potential of higher rates of return than GIA's / TD's. However they have a higher risk of suffering a loss of their principal / capital. Segregated Funds on the other hand has Death Benefit and Market Value Guarantees that limits the losss an Investor can incur on a longer term horizon.

 

 

Summary

 

We have developed a strategy using the understanding of features in these different investment vehicles, to position your investment account for long term growth, while providing the guarantee of the safety of your capital at the same time. Minimums do apply and determining your personal Investor Profile is required. eMail me for an Investor Profile Questionaire and to schedule a telephone appointment to fill out the questionnaire  together. We will then use the results of your investor profile to construct an investment portfolio and provide you with a comprehensive report. 

 

Barrington C. Mullings (905) 826-8138 or (416) 523-3256

 

Here is a graphic example of what your Investor Profile might look like.

 

Sample Profile


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Barrington Mullings (905) 826-8138
Barrington Mullings (905) 826-8138