By Adrian Spitters and Win Wachsmann. “Darn,” Robert mumbled under his breath as he looked at his investment statement.
“It looks like a rollercoaster!”
Had it even recovered from the downturn of 2007-2008, he wondered?
As a boomer approaching retirement, “Time” was no longer his friend but his enemy!
His friend George had said just the other day “Buy and hold won’t work anymore because you don’t have enough time to wait for the market to rebound and go back up.
Any losses incurred now will require 2 times the growth just to cover the losses. A 10% loss in your portfolio means it will need to grow at 20% just to stay even.”
Was that even possible in today’s volatile market with a stumbling economy and High Frequency Trading by the big guys?
Maybe it was time to examine his investment strategy and the strategy of his current advisors(s).
Most advisors were selected on their ability to outperform their peers. Fund B had a better return than Fund A so they suggested he move his money to Fund B. In many cases, their superior performance was based on increased risk. With increased risk, sometimes the fund went down and Robert’s advisor advised him to “Buy and Hold. It will get better and go up again in time.”
But life is different now! Isn’t that right?
- You need your money to be safe, available and sheltered from the clutches of the taxman.
- You need the same kind of advisor who uses a disciplined approach with a pension or endowment funds.
- You need advisors that select portfolio managers that are skilled at consistently meeting short and long term goals and long and short term pay-out obligations. Their primary job is to move assets between asset classes to reduce taxes and increase growth while minimizing risk.
A number of companies have introduced tax-efficient Corporate Class Managed Portfolio Solutions with disciplined managers described above.
Corporate Class Managed Portfolios are special mutual fund or pooled portfolios that are structured to operate like a corporation.
Standard mutual funds or pools are structured as trusts, but Corporate Class funds and portfolios are structured as corporations. This means that the Corporate Class Portfolio will hold several different funds or pools as part of a single tax entity.
If your eyes haven’t glazed over yet, please bear with me as I continue. I apologize if sometimes the language and jargon in our industry is just overwhelming. I will gladly answer all your questions about this very beneficial program.
In the same way that businesses move their money among different company accounts to cover expenses and make necessary purchases, the money managers in a Corporate Class Managed Portfolio move the invested money between the various funds to increase the value of the portfolio without triggering the payment of taxes and/or capital gains and losses.
The portfolio returns are also more tax efficient. The result is the managers can invest in funds with less of a risk factor in order to maintain equal or similar retirement income needs. Less risk, greater earnings.
The biggest advantage of a Corporate Class Managed Portfolio is that it provides many of the benefits that can be found with tax-free savings accounts or other registered accounts, including the ability to defer tax on investment income and capital gains.
To recap: Some of the benefits of Corporate-Class Managed Portfolio include the ability to:
- SWITCH or REBALANCE: Capital gains in one fund may be offset by losses in other funds. Thus no tax is payable. The result: TAX FREE SWITCHING and the fund grows and compounds quicker.
- MINIMIZE DISTRIBUTION: Spreading the gains and/or losses over all the funds reduces the amount of money that needs to be paid out as distributions. If money must be paid out as a distribution, that money is classified as capital gains and/or dividend income. When one receives capital gains or dividend income, the taxes to be paid are substantially less than if the money was received as interest income.
- RECEIVE tax-efficient capital gains or Canadian dividends from traditional income funds.
One of the oldest and comprehensive selections of Corporate Class Portfolios are managed by CI Investments Inc. Their Corporate Class Portfolio managers work hard at reducing interest and dividend income so that all you receive is capital gains with minimal dividend income thus reducing you’re your overall tax bill.
Their team is committed to growing your portfolio through tax deferred compounding and prudent management.
Can you see how DEFERRING and MINIMIZING taxes on your investments NOW can SUBSTANTUALLY increase the value of your investments over time?
We can’t guarantee that you won’t be caught in a market downturn, but we can reduce YOUR financial uncertainty!
Commissions, trailing commissions, management fees and expenses, may all be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Please read the prospectus and consult your Assante Advisor before investing. Please visit www.assante.com/legal.jsp or contact Assante at 1-800-268-3200 for information with respect to important legal and regulatory disclosures relating to this notice.
Win Wachsmann has been helping businesses improve their marketing and helping them get ready to sell their business. He doubles as an author, journalist, syndicated columnist, filmmaker and businessman who makes his home in the Fraser Valley of British Columbia. His articles and columns can be found in some of the finest offline and online magazines, journals and media properties.
He can be reached at email@example.com.