Most individual investors today are looking for opportunities to earn more monthly income while maintaining a diversified portfolio. There are two primary reasons investors may want to include fixed income investments in their portfolio:
Expert Management Trust deeds (TD´s) secured by tangible real property, when professionally underwritten and managed, have become a good investment alternative for the income-producing portion of an investment portfolio.
Diversification Trust Deed investing offers many investors, particularly retirees - another method of diversification to help reduce volatility in their portfolio and a way to generate additional income.
Historically, trust deeds have outperformed cash investments (bank deposits, CDs, money market instruments and US Treasury bills), and exhibited less volatility than stocks, although stocks and mutual funds can offer high returns, they have greater risks. Furthermore, the return on TD’s has often offset the negative return on stocks during periods of market downturn. As a result, adding TD investments to an all-stock portfolio generally increase’s overall return and lowers the overall risk of your portfolio.
Income Fixed-income investments involve loaning money for a period of time in exchange for periodic interest. A Trust Deed Investment can generate additional income to supplement existing income sources.
Tax Advantage The interest income generated by some fixed income investments in a retirement account such as an IRA are tax deferred or tax exempt from federal and/or state income taxes.
Additional Benefits of Trust Deed Investing: • No Load Investment - there are no fees for investing
• Higher Fixed Yield – goal of 8-11% interest paid monthly
• Security – 65% LTV trust deeds backed by California real estate
• Stability - interest stays constant throughout the term of the loan
• Fixed Principle - principal value of investment does NOT vary... unlike stocks and bonds
We recommend that new investors become familiar with trust deeds prior to investing. Please view www.dre.ca.gov/pdf_docs/re35.pdf
