November (26.0 MB) - Senior Connector

Page 26Senior Connector www.seniorconnector.comNovember 2011Searching for Investment Income?Explore All Your OptionsAs an investor, you obviouslywant your money togrow over time. But at manypoints in your life, you’llalso need your investmentsto provide you with income.Fortunately, you’ve got somegood choices available tohelp produce the incomeyou’ll need — today and inthe future.Consider the followingtypes of income-producingvehicles:• Fixed-income laddersFixed-income investments,such as bonds and GuaranteedInvestment Certificates(GICs), provide income inthe form of interest payments.Typically, longertermbonds pay higher interestrates to reward you forlocking up your money foran extended time period.However, you may not wantto just stock up on longtermbonds, because wheninterest rates rise, longertermbonds tend to fall morein price. To help reduce thisvolatility, you may want tobuild a fixed-income “ladder”of bonds and GICs ofvarying maturities. Wheninterest rates are low, you’llstill have your higher-paying,longer-term bonds workingFinancial FocusSubmitted by Lili Seery of Edward Jonesfor you. But when marketrates rise, you can reinvestthe cash from your maturingshorter-term bonds andbuy new ones that pay thehigher rates. • Income guaranteesUnless a bond issuerdefaults, you can generallycount on receiving regularinterest payments. But ifyou want an even strongerincome guarantee, you maywant to invest in an immediateannuity or segregatedfunds with guaranteed minimumwithdrawal benefits(GMWBs). As its namesuggests, an immediateannuity will make paymentsimmediately, or very soonafter purchase, and thesepayments can continue forthe rest of your life. A segregatedfund with a GMWBprovides some protectionby allowing you to withdrawa percentage of yourinvestment annually guaranteedfor life. The downside of immediate annuitiesand segregated funds isthat they may give you lessaccess to your principal thanother investment vehicles,as well as less inflation protectionand higher fees. Butthe opportunity to have aguaranteed income for lifemay outweigh those disadvantages.• Dividend-paying stocksYou can invest in stocks orstock-based mutual fundsthat provide income in theform of dividends. If youdon’t currently need theincome, you can reinvest thedividends, thereby increasingthe amount of shares youown. Of course, you will beincurring greater risk to yourprincipal than if you investedin fixed-income vehiclesor immediate annuities.Also, companies can reduceor eliminate dividends at anytime without notice. However,dividend-paying stockstypically offer much higherreturns than bonds. And infact, for the last 10 years, theaverage return for dividendpayingstocks exceeded thereturn for stocks that don’toffer dividends.Furthermore, many companieshave consistentlyincreased their dividendsyear after year. This meansthat by investing in somedividend-paying stocks, youcan achieve rising income,which you will need to stayahead of inflation. This isespecially true during yourretirement years, when youmay no longer be able tocount on regular increasesin earned income fromemployment. A professionalfinancial advisor can helpyou choose the right mix ofincome-producing vehicles— bond ladders, immediateannuities, segregatedfunds with GMWBs anddividend-paying stocks — tomeet your needs, given yourrisk tolerance, family situationand other factors. Bycreating an effective investmentstrategy, you can goa long way toward achievingthe income you need toreach your goals. Canadian Investor ProtectionFund Member Capt. Joe JasperMike Keetch, Egypt 1966Bud and Rose PetitBill ValliRita WallaceDan and Joyce DunnG r o c e r y S h o p p i n GPhone and placeyour grocery& prescriptionorders.A S S i S tA n c eSeniors Outreach Services Societyin conjunction with Canada Safewaywill help you do your shopping.No extra cost!FREE DELIVERY(with minimum $35 order)Service available to seniors in need ofassistance, shut-ins and disabled only9 am – 4 pm128 – 540 Seymour StreetFor more information, call250-828-0600Every Thursday 9 a.m. to 12 p.m.Mon – FriAvailable at Sahali & North Shore Safeway, KamloopsSahali 374-2811North Shore 376-8439saf02