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April Newsletter
Personal Wealth and Finance
April 1, 2025
There are many reasons that make investing in segregated (seg) funds a significant strategy when creating wealth. See if these reasons appeal to you and discuss seg funds with your advisor:
- Simplified investing You can select an industry or sector, for example, without having to hand-pick each security. The segregated fund manager does this selection process for you. You don’t have to be assessing which stock or bond may or may not be a winner. A fund manager is trained to weigh out all the market contingencies which can affect investor performance.
- Diversification A small monthly purchase plan can have you moving forward in your strategic fund investments in a day. Your money can buy a piece of many different investments held within one or more funds.
- Dollar-cost averaging is an investment strategy that allows you to buy more fund units when the unit values are down and fewer when they are high, allowing you to benefit from downward volatility.
- Flexible access to your money You can sell your fund shares in one day, and your proceeds are available the next day if you need your money in the short term.
- Portfolio-balancing Choices include the full range of fund types and strategies available, such as strategic balancing of your segregated fund holdings.
- Capital guarantees Segregated funds may offer certain principal guarantees at maturity and/or death. In some cases, market gains can be locked in and guaranteed after a period of time. Some segregated funds have options to lock in a portion or all of the gains to date, which resets a guarantee at a higher level after a defined period.
- Avoidance of Probate The proceeds of a segregated fund policy flow to the beneficiaries without going through probate, which can avoid significant estate fees. It can also prevent disgruntled beneficiaries from contesting these funds if they pass through a will.
- Potential Creditor Protection Creditor protection is offered because it is an insurance product, insofar as the investment is made before any creditor issues are apparent. Discuss this with your advisor to keep abreast of legislation regarding creditor protection.
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The particulars contained herein were obtained from sources which we believe are reliable, but are not guaranteed by us and may be incomplete. This website is not deemed to be used as a solicitation in a jurisdiction where this representative is not registered. This content is not intended to provide specific personalized advice, including, without limitation, investment, insurance, financial, legal, accounting or tax advice; and any reference to facts and data provided are from various sources believed to be reliable, but we cannot guarantee they are complete or accurate; and it is intended primarily for Canadian residents only, and the information contained herein is subject to change without notice. References in this Web site to third party goods or services should not be regarded as an endorsement, offer or solicitation of these or any goods or services. Always consult an appropriate professional regarding your particular circumstances before making any financial decision.
Mutual Funds and/or Segregated Funds Disclaimer
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investment funds, including segregated fund investments. Please read the fund summary information folder prospectus before investing. Mutual Funds and/or Segregated Funds may not be guaranteed, their market value changes daily and past performance is not indicative of future results. The publisher does not guarantee the accuracy and will not be held liable in any way for any error, or omission, or any financial decision. Talk to your advisor before making any financial decision. A description of the key features of the applicable individual variable annuity contract or segregated fund is contained in the Information Folder. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value. Product features are subject to change.
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Mutual Funds and Segregated Funds provided by the Fund Companies are offered through Worldsource Financial Management Inc., sponsoring mutual fund dealer. Other Products and Services are offered through Stuart Rowles and Rowles Financial.
Worldsource Financial Management Inc - Disclaimer
Commissions, trailing commissions, management fees and expenses all may be
associated with mutual fund investments. Please read the fund specific
simplified prospectus before investing. Mutual funds are not guaranteed and
are not covered by the Canada Deposit Insurance Corporation (CDIC) or by any
other government deposit insurer. There can be no assurances that the fund
will be able to maintain its net asset value per security at a constant
amount or that the full amount of your investment in the fund will be returned
to you. Fund values change frequently and past performance may not be
repeated.
Labour Sponsored Investment Funds (""LSIF"") have tax credits that are
subject to certain conditions and are generally subject to recapture, if
shares are redeemed within eight years. Please note that Mutual Fund
Representatives in Alberta are not permitted to sell LSIF.
Your Worldsource Financial Management Inc. ("WFM"), mutual fund advisor
maintains business interests that are separate and distinct from his/her
WFM business activities. You will be provided complete information concerning
these outside business interests, including who is responsible for each
business activity. The disclosure will provide you with that information and
will explain your rights and with respect to business that you place with WFM
through your mutual fund advisor. WFM assumes responsibility and liability
for “Worldsource Financial Management Inc. Business Interests” only. All
business activity undertaken by your mutual fund advisor that are not the
specifically designated as “WFM Business Interests” are not the responsibility
of WFM. Therefore, WFM does not assume any liability for any such activity.
The information contained on this Internet Website is for general information
purposes only and is the opinion of the owners and writers. Investors should
educate themselves regarding securities, taxation or exchange control
legislation, which may affect them personally. This web site is for general
information only and is not intended to provide specific personalized advice
including, without limitation, investment, financial, legal, accounting or
tax advice. Please consult an appropriate professional regarding your
particular circumstances.
This Internet Website does not constitute an offer or solicitation in any
jurisdiction in which such offer or solicitation is not authorized or to any
person to whom it is unlawful to make such offer or solicitation.
References in this Internet Website to third party goods or services should
not be regarded as an endorsement of those goods or services. By accessing
any of the links provided you will be leaving the Rowles Financial Website.
Rowles Financial is not responsible for the information contained on these
websites.
All information provided is believed to be accurate and reliable, however,
we cannot guarantee its accuracy. Worldsource Financial Management Inc. will
not be held liable for any inaccuracies in the information presented, nor
will WFM be held liable for any software damages resulting from the use of
this website. Mutual funds are offered only in Canada.
Risk of Borrowing to Invest
Here are some risks and factors that you should consider before borrowing to invest:
Is it Right for You?
- Borrowing money to invest is risky. You should only consider borrowing to invest if:
- You are comfortable with taking high risk.
- You are comfortable taking on debt to buy investments that may go up or down in value.
- You are investing for the long-term.
- You have a stable income.
You should not borrow to invest if:
- You have a low tolerance for risk
- You are investing for a short period of time.
-
You intend to rely on fund distributions / income from the investments
to pay living expenses.
-
You intend to rely on fund distributions / income from the investments to
repay the loan. If this income stops or decreases you may not be able to
pay back the loan.
You Can End Up Losing Money
-
If the investments go down in value and you have borrowed money, your
losses would be larger than had you invested using your own money.
-
Whether your investments make money or not you will still have to pay back
the loan plus interest. You may have to sell other assets or use money you
had set aside for other purposes to pay back the loan.
- If you used your home as security for the loan, you may lose your home.
-
If the investments go up in value, you may still not make enough money to
cover the costs of borrowing.
Tax Considerations
- You should not borrow to invest just to receive a tax deduction.
-
Interest costs are not always tax deductible. You may not be entitled to a
tax deduction and may be reassessed for past deductions. You may want to
consult a tax professional to determine whether your interest costs will be
deductible before borrowing to invest. Your advisor should discuss with you
the risks of borrowing to invest.
