Showing posts with label Investment. Show all posts
Showing posts with label Investment. Show all posts

Friday, April 12, 2019

Getting Preferred Stocks and How to Buy Them

Preferred stocks and how to buy them

To know if a company has outstanding preferred stocks and if you can get them, grab hold of its annual reports or even the financial statements, if you can get hold of it. Now, take a look at its shareholders equity. If any preferred stocks have been issued, a mention would be made of it here. If this is outstanding, then you can read more about the company’s prospectus for more information. Generally speaking, all banks issue preferred stocks as a prime source of Tier 1 capital.

If you want an overview at large, check out the Quantum Online website. It is a terrific tool for investors of any type, and of course that would include those looking at investing in preferred stocks. You are required to register with the site in order to gain access to their tables and list of securities, but it is well worth it since it is free. If you look around, you’ll find information about preferred stocks detailing its ratings from credit agencies, share prices, retraction information, dividend amounts, etc. You can look at several good options, such as the Malachite Aggressive Preferred Fund. It is a fund that is actively-managed and made available only for accredited investors.

If you are an individual investor, you can also be accredited. You need to be able to hold financial assets worth a net realizable value of over $1 million (either in an individual capacity or in a household). Failing that, you must have income before taxes of more than $200K in each of the two preceding years or $300K if you are married. But the simplest option is that to be recognized as an accredited investor, you need to invest at least $150K in the fund. Who says money can’t buy you everything?

But there are several options for you as an investor, such as the JOV Leon Frazer Preferred Equity Fund (also an actively managed fund) that manages to create dividend income by investing in preferred stocks. ETF’s too can be an option, given how they are all the rage at the moment. The management fee on these ETF’s are obviously lower than it is with mutual funds and that is one of the key benefits of ETF’s. For example, the Claymore S&P/TSX CDN Preferred Share ETF tracks the preferred share index and does so for you at a management fee of 0.45% per annum.

There are some key differences between stocks, bonds and preferred stocks and if you are looking to invest further in preferred stocks, hopefully you would have gained a better idea of how to do so. The key is to take a look at the company’s prospectus, since it will be available online and easily accessible.

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Thursday, April 11, 2019

Dividend Mutual Funds Offer Investors Protection

Dividend Mutual Funds Offer Investors Protection

One of the best ways newbies to the world of investing can get started is to try and learn as much as they can about investing and start to diversify their portfolios as best as they can. Mutual funds, and dividend mutual funds are an excellent way of doing just that. There are several choices that can be made when choosing between several mutual funds, but dividend mutual funds are a great way to invest since you get a little more back than you normally might and it’s great for investors that are beginning to earn their stripes. What dividend mutual funds do is pick out investments that pay off dividends.

Just in case you’ve been curled up under a rock and don’t know what mutual funds are in the first place, here’s a quick recap. Mutual funds are a collection of investments clubbed under one head. The mutual fund manager chooses what to invest in and when you invest in it you invest in everything the mutual fund holds. For beginners this is excellent since you won’t have to pick out stocks and end up losing a lot of money. In addition, it will let you diversify your holdings and spread the risk around. So you can choose between money market mutual funds, bonds, or commodities, pretty much anything when picking out mutual funds. And dividend mutual funds are obviously also an option since they choose dividend paying investments and help you recover your initial investment faster.

The little bit extra that these dividend mutual funds offer makes them a very safe bet. After a pre-set period, some companies will pay out money from its profits to its shareholders. This can be quarterly, monthly, annually or even bi-annually. This is money you get simply for holding the stock of the company. You can do whatever you want with it and only have to remember that there are taxes to be paid on it. Some companies even allow these dividends to automatically be ploughed back into buying some stock. That means you get shares for nothing and your holdings and earnings are boosted steadily just for participating in these dividend mutual funds.

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Tuesday, April 9, 2019

Retirement Planning: No One Ever Said it Would be Easy

Retirement Planning: No One Ever Said it Would be Easy

One question that keeps on coming back to me like a faithful boomerang is on retirement and more specifically retirement planning. Everyone always ends up asking me just how much they should save up for their retirement. How do I put this delicately; there is no one number that I can give everyone. It’s just a personal thing. If I know you better, yes, I can give you a number. But allow me to explain why it’s such a point of personal reference. For some people a Volkswagen Golf GTI is their everyday car and a BMW M3 is a car they’d love to keep in the garage. For some though, the BMW M3 might be their everyday car while they’d love to see a Ferrari 458 Italia in the garage. Perspective; it’s a funny thing.

But how do you save up money like the numbers some people tout? Look, I never said retirement planning is easy; I did say it can be done though with some discipline, dedication and diligence. That’s the only 3D you need.

Just how much do you need to save?
Imagine you plan to work from 20 till you’re 60 (for calculation’s sake). What that means is you have to work for 40 years to get through potentially 20 to 30 years of your life. So your nest egg will be used up for almost as long as you will take to build it up. Now, let’s assume some more things. For one, let’s say your income matches the rate of inflation perfectly. Let’s also assume the same for your investments. Let’s also assume that your lifestyle remains unchanged. If that does happen, you will have to save something like 35% of your income each year. And that’s something not many people do.  Most people only save 5-6% per year, so you now see where the problem lies.

Retirement is getting earlier for most
Generations before us saved more and worked for more years than us and yet we want to retire earlier than them despite doing none of these things. We have a very materialistic mind and if you’re banking on your investments getting you to the Promised Land, you could be in serious trouble. Save more, invest better and work longer if you have to. Mind you, it doesn’t have to be a full-time job; even working as a consultant or part-time counts. Once you feel confident about money, you can always stop working and do whatever you want to.

Don’t ask when you can retire. Instead, know what you want to do and start planning towards it, whatever it may be.

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Saturday, March 2, 2019

Return On Investment Banking

Return On Investment Banking

Return On Investment Banking | Unlike the banking products that will record all public funds in financial accounting, investment funds in mutual funds accounted for separately from the accounting firm of investment managers and custodian banks. Why is that?

Return On Investment Banking | This happens because the mutual fund is a separate legal forms. The establishment conducted by investment managers and custodian banks based on notarial deed and shall have compulsory basic bookkeeping and tax number (TIN).

Return On Investment Banking | In the event of bankruptcy, you will receive back the funds held in bank of the payment by the Deposit Insurance Corporation (DIC) to a particular value or from the liquidation of assets.
Return On Investment Banking | While the mutual fund, if the investment manager or custodian bank to go bankrupt, mutual fund investors will receive back its investment funds in accordance with the net asset value (NAV) / last unit.

Return On Investment Banking | Alternatively, the management or administration of mutual funds are transferred to the investment manager or other custodian bank approved by the Capital Market Supervisory Agency and Financial Institution Supervisory Agency (Bapepam-LK).

Return On Investment Banking | Another difference, when you save in the bank, the fund will be managed by the bank for the bank to pay the promised interest rate. Management of the funds handed over to the policy of each bank.

Return On Investment Banking | When the bank suffered losses in the management of these funds, you will not come lose, and still earn interest as promised. Similarly, if banks get a big advantage, you will not earn any interest other than promised.

Return On Investment Banking | Conditions were different when you invest in mutual funds. You as the owner of the funds “can also determine” how your investment funds are managed. How, by making the choice of mutual funds in accordance with your wishes. Is it money market funds, fixed income, mix, share, or protected.

Return On Investment Banking | Each type has characteristics of mutual fund returns and risks vary. Furthermore, if investment managers are able to manage your funds properly in accordance with the investment policies contained in the prospectus and produce high yields, the overall results is yours.

However, if you find that mutual funds suffered losses, you also have to bear the risk of loss.
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