Reducing Portfolio Investment Risk
Investing in a Mortgage Investment Corporation (MIC) can be a good way of adding mortgages as an asset class to your current investment portfolio. Shares of a professionally managed MIC can offer investors access to diversification in the mortgage market that may not normally be available to them. Diversification is very important when seeking to lower portfolio investment risk.
In the mortgage industry, a client who elects to directly invest in a mortgage is commonly referred to as a ‘Private Investor’. A direct investment in the Canadian mortgage market requires, in addition to your money, your ongoing investment of personal time to administrate and manage the mortgage. For Private Investors it can sometimes be very difficult to find quality lending opportunities. Perhaps even more importantly, it can be difficult to truly understand the risks involved when faced with mortgage underwriting decisions. Understanding investment risk and pricing the risk correctly is key to successful mortgage investment. Sometimes the best decision is the mortgage you don’t invest in.
Another risk facing a Private Mortgage Investor is the loss of interest income during the period when a mortgage is paid out and the funds are sitting in cash waiting to be reinvested. By investing in shares of a MIC, this reinvestment risk can be reduced because your funds are always working.
Great Pacific Mortgage & Investments Ltd. offers investors the choice of three professionally managed Mortgage Investment Corporations which can help to add investment diversification to both large and small portfolios.
Paul Croy
Video: What is a Foreclosure? – Mortgage Investment Corporations
Rory Campbell and Walt Neufeld explain what is a foreclosure and how it is used to protect mortgage investments in Mortgage Investment Corporations.
Video: What is the risk of investing in Mortgage Investment Corporations?
A discussion on the risk of investing in Mortgage Investment Corporation (MIC) Funds at Great Pacific Mortgage & Investments. – Rory Campbell and Walt Neufeld
What We’re Talking About
It’s time somebody started a conversation about Mortgage Investment Corporations (MICs) – so here we are. And while we’re at it, we will also provide a fresh perspective on the topics of economy, real estate, investing and borrowing.
On a weekly basis, we will be responding to and providing our perspective on financial and real estate news and we will begin a discussion about MICs starting with what they are, how they work and how to ensure you are investing in a quality investment, whether it’s a MIC or not.
You will meet the team of Great Pacific over time as we all participate in this discussion. We don’t always agree but that’s part what makes us good at what we do and it does make life just a little more interesting.
By Rory Campbell, Walt Neufeld & Jeff Moses
