FIXED INCOME

First National Mortgage: Essentially a ‘lending bank’.  It takes our money and as a group it lends out funds to borrowers using their real estate as a high level of collateral. It lends primarily to apartment, retirement, office, industrial and retail lenders.

ACM Commercial Mortgage: Works in the same manner as First National at lending funds out to borrowers and using real estate as security collateral, but focus on commercial properties in Canada only and tends to have a lower (but safer) payout. More crucially their unit values do not trade on the open Toronto stock markets and instead you buy or sell back to the company on a monthly basis.  

AGF Floating Rate Income: invests in a basket of primarily U.S. (although can have Global names as well) bonds that might be of lesser company quality, but can potentially have more security attached to their issues and promises to pay an income payment that can rise if certain key interest rate benchmarks – like LIBOR – rise as well.

Exemplar Investment Grade Bond: Invests in a basket of longer-termed higher-grade company bonds (TELUS, as an example) for the purpose of creating a consistent income stream, but hedges the risk of rising interest rates by shorting (betting against) Government bonds that would lose value if rates move up. Works well in times of rising rates, but not so well when interest rates decrease.

AGF Short-Term-Income: a safer and liquid fund that holds short-term corporate bonds with the majority of them having floating rate capabilities. 

EQUITY INCOME

Dynamic Alternative Yield: An alternative mutual fund that focus on mortgage, real estate, Covered Call Option stock investing along with buying into discounted Closed-End funds for higher opportunities. They are primarily investing in the U.S.A, but have a minor Global exposure as well. Can also utilize Put options to hedge the risk of their stock holdings.

First Asset Can-Financial: Invests in a basket of Canadian financial companies and uses Covered Call Options to create additional income (basically gives up the rights to a certain potential upside in return for income payments now).

First Asset Can-Materials: Invests in a  basket of resource based companies – heavy on minerals like Gold & Silver. Also uses Covered Call Options to increase dividend payments.

First Asset Can-Energy: A basket of energy stocks with additional income derived from Covered Call Options.

iShares Balanced Income Core ETF: Holds a diversified basket fixed income categories (gov’t corporate, high-yield, international and real return bonds along with a minority of real estate income and Canadian and U.S. Dividend income ETFs). It is designed to be a one-stop investment category. 

EQUITY STOCKS

Dividend Growth Stocks: I like a variety of individual dividend growth stocks. The concept of receiving dividends and having a steady increase of those dividends is a powerful combination, especially for the long-run if you compound by reinvesting and adding more shares. 

AGF US Alpha Sector: Yes, a rare mutual fund for me, but it invests in the U.S. stock market via different Exchange Traded Fund (ETFs) blocks in the large sectors (think consumer stables, transportation, technology etc…), but the diversification is managed not by a human manager, but by an algorithmic formula that searches for acceleration or deceleration of growth and volatility. In its mandate can actually move 100% in cash if it receives enough signals. Rarely has happened, but did in 2008. Its performance has been good on the upside, but better on the downside.

iShares Balanced Growth Core ETF: another one-stop investing vehicle, but primarily focused on domestic and international stocks with a very small smattering of bond ETF holdings. 

OPTIONS STRATEGIES

Thomas Tsiaras is one of the few Investment Advisors in Canada who is licensed to deal with not only mutual funds, bonds and stocks, but also with Options. There are numerous variety of Options investment strategies you can use, but at this time I like to stick with one that’s tried-and-true.

THE COLLAR STRATEGY

A collar is an options trading strategy that is constructed by holding shares of the underlying stock while simultaneously buying protective puts and selling call options against that holding. The puts and the calls are both out-of-the-money options having the same expiration month and must be equal in number of contracts.

The purpose of this strategy is to be able to invest in a chosen stock that ideally pays a decent dividend income stream, but to limit the amount of loss one can potentially suffer if the stock or the market goes bad. And while you have a decent total upside return you must understand that with this strategy your potential gain is limited and capped.

A graphical view of this strategy would be this for us:

option-collar-strategy-iu