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 The market
is a great long-term investment.
The ups and downs of the market impact our financial futures a whole lot
less than our reactions to it. Unfortunately, we seem unalterably
programmed to buy high and sell low. And even though history shows us
time and again the error of this, we keep doing the same thing and
expecting a different result.
The
market is now down about 10 percent for the year and more than 15
percent from its high in October of last year. Sensationalistic
headlines read something like "worst start ever for the stock market,"
and "as January goes, so goes the year." Such anxiety-inducing hype
makes it virtually impossible for us to ignore the doom and gloom and
just stay the course, but that's exactly what you should do.
On the
other hand, if you can accept that bear markets are a necessary part of
stock market investing, then look at this as a buying opportunity. If
the market goes down further, it's an even better buying opportunity.
In the
words of Warren Buffett, "Be fearful when others are greedy and greedy
when others are fearful." That may be easier said than done, but it's
good advice.
One
way to take advantage is with a simple, yet powerful, wealth-creation
strategy - investment leverage. Leverage is simply
borrowing money to purchase investments with the goal of achieving
greater wealth.
For
those unfamiliar with investment leverage, this strategy may sound a bit
intimidating but it's actually quite simple.
Whether you know it or not, you may have already taken advantage of this
strategy. For example, if you've had a mortgage, a student loan or an
RRSP loan, you've used someone else's money to achieve your goal of home
ownership, higher education or a more comfortable retirement.
Investment leverage is similar to the examples above. Leverage is simply
borrowing money to purchase investments with the goal of achieving
greater wealth.
Now,
it's probably easy for you to see how a mortgage can help you achieve
the goal of home ownership. However, it may be less clear how taking out
a loan to buy an investment can help you achieve the goal of greater
wealth.
I have
attached a flash presentation. It is in easy-to-understand language and
describes what investment leverage is and how it works. And, at the end,
there are some questions to help you determine if investment leverage is
right for you.
http://manulifedc.com/files/banking/InvestmentLeverage_preload.swf
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Loan amounts
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$10,000 to $250,000
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Interest rate
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Submitted online - Manulife Bank prime +0.75%
Submitted on paper -
Manulife Bank prime +1.25%
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Margin call
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No
margin call due to market fluctuations
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Availability
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Personal non-registered accounts only
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Repayment
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Interest only
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Client equity
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Not
applicable
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Underwriting
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$10,000 to $100,000 - Limited underwriting (good credit rating)
$100,000 to $250,000 -
Full underwriting
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If you
are ready to dive into the market, Manulife Bank is making it easier.
From March 17 to May 31, 2008, all new eligible Manulife Bank Quick
Loans will automatically have the
first three months of interest charges waived when the investment is
funded!
Call
if you would like more details.
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