Investing your money in mutual funds is a wise move especially for your long term goals. There are different types available in the market. One of these is the income mutual funds whereby the investor gets an income on a monthly or quarterly basis. Other types focus mostly on capital growth instead of this type or they opt for a combination of both. When you want to invest for a long period of time and get a regular income, then this is the option you need to consider. When you invest in this type of fund you get a percentage of its total earnings.
You make an initial investment of a couple of dollars or even less and still enjoy the benefits of owning a part of a large portfolio. Income mutual funds are mostly categorized as either balanced or equity income funds. The balanced type normally tries to balance the investments in stocks and bonds. The income equity funds often concentrate more on dividend paying stocks. Despite the fact that they may both have varying holdings, their main focus is generating and maintaining a high income level and preserving capital.
In comparison to money market or bonds funds, they are considered to be a better investment choice. This is because they produce higher returns than those that you would find in the money market and bond funds.
This type of investment is also considered quite safe as they mostly invest in companies that are creditworthy and established. These companies can be counted onto provide dividends and interest payments.
Mercy Maranga writes content on Finance and Finance Management. Visit her site here for more information on Mutual Funds and how to effectively invest your money.
The 2008 financial crisis uncannily echoes what happened in Japan more than a decade ago. In the 1990s, the Japanese banking systems had become overloaded with bad loans after a property bubble collapse, according to Gillian Tett, author of Fool’s Gold. The investor psychology seemed dangerously similar too. If this is the case, investors who high yield stocks now could collect big dividends while the economy fights to get back on its feet.
The Associated Press (AP) reported on Friday that the U.S. federal budget deficit has surged to an all-time high of $1.42 trillion. The Obama administration projects deficits will total $9.1 trillion over the next decade. For weeks the US dollar’s decline sent gold to all-time highs and helped oil to over $78. Canada happens to have plenty of these commodities.
The following are 18 Canadian companies listed on U.S. exchanges with market caps greater than $1 billion, reasonable P/E ratios, and dividend yields greater than 3.5% (sorted by yield):
Name
Symbol
P/E
Yield
Market Cap
PROVIDENT ENERGY TR
(PVX)
9.0
11.1%
1.66B
PENGROWTH EGY UTS
(PGH)
5.0
10.6%
2.61B
PENN WEST ENERGY TRU
(PWE)
5.1
10.1%
6.90B
ENERPLUS RES FD
(ERF)
5.8
8.4%
3.97B
HARVEST ENERGY TRUST
(HTE)
4.2
8.1%
1.14B
B C E INC
(BCE)
21.7
6.1%
18.82B
TELUS CORP
(TU)
8.6
5.8%
9.41B
PRECISION DRILL TRST
(PDS)
4.3
5.7%
1.91B
BANK OF MONTREAL
(BMO)
17.3
5.1%
27.68B
TRANSALTA CORP
(TAC)
21.9
5.1%
4.07B
BAYTEX ENERGY TR UTS
(BTE)
12.8
5.0%
2.77B
CANADIAN IMP BK COMM
(CM)
3.7
5.0%
2.98B
BROOKFIELD PTYS CP
(BPO)
6.2
4.6%
4.47B
TRANSCANADA CORP
(TRP)
15.1
4.3%
21.71B
SHAW COMM CL B NV
(SJR)
15.6
4.2%
8.24B
ROGERS COMMUN CL B
(RCI)
16.8
4.0%
16.57B
BANK OF NOVA SCOTIA
(BNS)
16.7
3.9%
45.86B
TORONTO DOMINION
(TD)
17.4
3.5%
53.70B
These 18 high-dividend companies are in 4 sectors: Energy, Financial, Telecom and Utilities.
Energy Income Trust
High demand from China and a weak US dollar make the energy sector attractive. 7 companies belong to energy income trust category:
Symbol
Operating Margin
Debt/Operating CF
52-wk Range
(BTE)
36%
1.0
7.84 – 26.44
(ERF)
51%
0.7
12.85 – 28.58
(HTE)
10%
3.2
3.00 – 11.55
(PDS)
28%
2.0
2.00 – 12.21
(PGH)
22%
2.5
4.51 – 11.90
(PVX)
23%
1.5
2.23 – 6.84
(PWE)
58%
2.3
6.77 – 19.01
For sophisticated traders, trading commodities directly might provide a higher reward. For income investors, commodity companies might be a better choice because they provide some buffer, in addition to regular dividends.
There is a small ETF called Claymore Canadian Energy Income (ENY) which includes most of these companies. Its yield is 5.45%.
Financials
The Following are comparisons between Canadian banks, U.S. major banks averages, as well as JPMorgan Chase (JPM), one of the most conservative banks in the US. Clearly Canadian banks are much more profitable.
Description
P/E
ROE %
Div. Yield %
Net Profit Margin %
U.S. Money Center Banks
n/a
1.1%
1.1%
1.3%
JPMorgan Chase & Co. (JPM)
52.6
2.9%
0.4%
15.5%
Toronto-Dominion Bank (TD)
17.6
9.4%
3.5%
22.2%
The Bank Of Nova Scotia (BNS)
16.8
13.2%
3.9%
28.9%
CIBC (CM)
3.8
7.0%
5.0%
18.8%
Bank of Montreal (BMO)
17.4
9.2%
5.1%
21.8%
Telecom
Competition in the telecom sector is heating up in Canada. When BCE (BCE) and Telus (TU) announced they will start carrying the iPhone next month which puts an end to the exclusivity that Rogers (RCI) has enjoyed, it sent RCI’s short ratio to a stunning high of 33. Unlike those 3, Shaw Communications (SJR) primarily focuses on cable services.
Utilities
TransAlta (TAC) is an electric utility company while TransCanada (TRP) operates through two segments: pipelines and energy. TAC’s short ratio of 5.8 makes me nervous.
Conclusion
After boldly buying when others were selling, Warren Buffet is pulling back, buying fewer stocks while investing in debt. He is warning that the economy, though on the mend, remains deeply troubled.
In addition, the Canadian dollar is a strong threat to the Canadian economy. CurrencyShares Canadian Dollar Trust (FXC) appreciated over 13% this year. Mark Carney, the governor of the Bank of Canada, has warned that the Canadian dollar appears to be moving away from the fundamentals.
The iShares MSCI Canada Index (EWC) year-to-date’s return is an astonishing 46%. A great stock can be easily turned into a bad investment, if you it at a higher than reasonable price. It all depends on the starting price.
Nonetheless, high-dividend, fundamentally-strong companies are more likely to survive in this stormy market. One of the greatest ways to protect your portfolio is through asset allocation: to make sure not a single sector accounts for more than 20% of your portfolio. Be sure to re-balance as it will automatically enroll you into the “ low, sell high” camp.
Disclosure: I have long positions on BMO, BNS, CM, PWE, TD, and TRE. All data is from Yahoo Finance (http://finance.yahoo.com/) as of Oct 16, 2009.
When it comes to finding an investment loan, whether you want to purchase property or help fund a new product or an upcoming business it is always important to do your homework. Even in today’s economy there are many options available to an individual who would like to secure an investment loan, this is where taking the extra time to research your options has the potential of saving you thousands over the course of the loan. It is important to understand that there is a major difference between an investment loan and a mortgage or business loan, and these differences need to be understood even before you approach your financial institution.
All loans are not created equal and understanding the purpose of each option can have very positive effects on your bottom line. When it comes to investing in property either for resale or for potential rental income it is important to know that the loan you will need is an investment loan, not a mortgage. While both loans seem the same on the surface, in actuality they are very different. There are many tax incentives and programs that are available to those who have a mortgage on a property that are not available for those who have an investment loan, and vice versa.
When attempting to secure a loan for either a business or a new product there are different types of loans that are available depending on the amount of interest you will have in the business. If you want to start your own business then you will need to secure a business loan, however if you only want to become an investor or have a small interest in an existing business then you will need an investment loan. The same is true if you are in a position to help bring a valuable new product onto the commercial or private market. Depending on how much interest you have in the venture will depend on what type of loan you will need to secure, however in this situation the most common is an investment loan.
While all of this may sound confusing there are many ways to determine the exact type of loan you will need in any given situation. The first step is to always do your homework both on the type of loan you will need to secure and you personal finances. Understanding every possible avenue when it comes to funding can greatly increase the chances of getting the best deal possible. It also has the potential of saving thousands of dollars over the course of the loan.
There are a few key facts that have not changed when it comes to securing an investment loan, and they start with knowing exactly how much interest you will have in a property, business, or new product. An investment loan should only be considered if you want to “-into” a company, purchase an investment property, or help fund a new product that on the market. This is a simplified explanation of the best times to obtain a investment loan, however you should always speak to your financial institution to customize the right funding options for your situation.
Austral Mortgage makes choosing the right for you easy. Your Choice of will impact on your Investment Return. We have a wide range of loans to suit your mortgage needs. We also provide advanced mortgage calculators to help make your financial decisions easy.
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Cigars are available in a wide range of prices with a great variety in terms of qualities. While the most discerning cigar fanatic can purchase cigar brands that cost upwards of several hundred dollars for just a small pack, he may also choose from a range of discount cigars that promise a really pleasing smoking experience. In fact, many people do not know that some of the high quality brands of cigars can be purchased at steeply reduced prices; only if one is ready to do a little search around. Discount cigars constitute a substantial portion of the multi-billion dollar cigar industry in North America, making the cigars accessible to smokers belonging to all income levels.
One of the widely accepted methods of purchasing discounted cigars is via the Internet. Even a simple search for ‘discount cigars’ is bound to produce hundreds of results with lots of low-priced cigar brands to choose from. There are many prominent discount cigar merchants also that offer low-priced cigars, lighters and humidors. Some popular sites are perfect for any cigar lover looking for quality tobacco and cigar products at reduced prices. Some of the most liked brands of premium cigars are made available at highly discounted prices. These brands feature several different types of cigars having varying tastes. Even though, they are available at discounted prices, they do not compromise on quality, and those types of cigars are widely purchased and smoked by smoking enthusiasts all over the world.
The key way to avail of real savings in discount cigars is by buying them in bulk. Often, when an individual opt to a large assortment of tobacco cigars at one go, major discounts are provided. Cigar bundles are a popular choice among smokers who yearn for a variety of cigar choices or sheer quantity for purposes of gifting them to friends and relatives. Although a few of the well known brands of cigars are always expensive, discount cigar sellers can make cigars and cigar products affordable for people belonging to all income groups.
On the other hand, everyone knows that it is risky to smoke cigars and cigarettes, but only a very few know about the dangerous effects of smoking a cigar. Smoking tobacco cigars on a daily basis is proved to be dangerous for your health. Studies have revealed that cigar smoking cause cancers of the lungs, oral cavity and oesophagus in human beings. More recent studies state that pancreas cancer is also caused, in rare instances, by cigar use. The chances of contracting heart and lung diseases will get increased as you enjoy cigars by inhaling the tobacco smoke. The smoker is at an increased risk of contracting oral cancer compared to a nonsmoker. The deleterious effects of regular cigar smoking are well documented and are well known. Another thing is that it is more addictive when compared to cigarettes. It does not matter at all the way in which tobacco cigars are smoked. As long as there is nicotine in these cigars, it is sure to produce addictive effects.
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