20th May 2009
Is your Term Deposit maturing?
Many investors are facing the hard decision of whether or not to roll their money into another term deposit at a somewhat reduced rate or look for alternative investment opportunities.
La Trobe believes low bank deposit interest rates are leading some investors to start looking at quality returns from fixed interest investments and mortgage funds. Our Pooled Mortgages Option has increased funds under management every month in 2009 and generally we have had a 30% increase in investor application requests over the past month.
Why Managed Funds?
Building wealth using managed funds should deliver higher returns on your money than cash over the mid-to-long term. As with many forms of investing, the higher the returns, the higher the risk. As a result for some investments it's important that you have time on your side, as such investments usually have a recommended time horizon of one to three years to allow you to ride out the ups and downs of the market.
However, different managed fund investments have very different return profiles, so understanding the product risks is key. Low volatility products such as conservative mortgage funds should offer regular and relatively stable income, and capital value that varies only if both borrower defaults and the security value reduces considerably.
By way of example, our Pooled Mortgages Option’s rate of monthly return since October 2003 has only moved between 6.95% and 8.25% and there has never been a loss in investors’ capital value.1
Differentiation and diversification from cash rate based products are also underlined by the premium of the Pooled Mortgages Option’s present distribution rate (6.95%).1 to the official cash rate (3.0%) which is at cyclical highs.
It is also important to note that in times of uncertainty, investors should always look to diversify their investments using respected and proven managers. All of the better known managers have diversified funds that allow the individual investor to select investment options which meet their risk profile. La Trobe offer our investors four investment options, Cash and Mortgages, Pooled, Select, and Special Select.
IMPORTANT: You Do Not need to pay entry fees when investing in managed funds!
Nearly all fund managers charge an entry fee (up to 6% of your investment) on managed funds. DO NOT PAY IT! There is no catch; La Trobe does not charge any entry fees. The full amount you deposit is paid directly to our account. You just need to ensure that the application you send in has your bank account details so your monthly income can commence immediately.
If you do not understand how La Trobe can save you money or if you have any concerns, please call our investor liaison team on 1800 818 818 and we will explain over the phone the benefits of our fund. A simple phone call may save you hundreds of dollars. And once you understand that you really do not have to pay entry fees on managed funds you will be telling everyone you know.
La Trobe Australian Mortgage Fund now paying PMO 6.95% p.a.1 variable; CMO 5.25% p.a.1 variable; Select Mortgages Option up to 10.90% p.a.*1 fixed/variable; Special Mortgages Option up to 18.50% p.a.*1 *Subject to availability.
Youth should thank their parents
A little message I recently received from a great friend started me thinking as to how we can learn from the past and the older generation. In fact we thought its reprinting here could be beneficial for those of us with children or grandchildren who think they know it all… it is a timely reminder to today's youth to 'get some perspective'. It is condensed from an address to graduating University students reprinted from "Better Business" and hope that our Investor base appreciates the sentiment.
We have many commentators telling today's youth what a mess the older generation have made of the world, and that youth are the only hope of mankind or how bright and better educated they are. I'm going to reverse the process.
What Youth of today should read?
Your parents and grandparents are the people who in just five decades (1920–1970) have, by their work, increased your life expectancy by about 50 percent. These are the people who, while cutting work time by a third, have more than doubled per capita output.
These are the people who have given you a healthier world than they found. Because of this, you no longer have to fear epidemics of typhus, diphtheria, smallpox, scarlet fever, measles, polio or TB, as they did.
Let me remind you that these remarkable people lived through history's worst depression. Many of them know what it's like to be hungry, cold and poor. And because of that, they were determined that you would have a better world, a better life; you would have food to eat, a warm home, better schools and great opportunities to succeed than they had.
Because they gave you the best, you are the tallest, healthiest, brightest and probably best looking generation to inherit the land.
Because they lived productive lives and worked hard often without reward, you will work fewer hours, learn more, have more leisure time, travel to more distant places and have more chances to follow your ambitions. These are the people who helped defeat tyranny, and when it was all over, had the compassion to spend billions of dollars to help their former enemies rebuild their homelands.
While they have done all these things, they have had some failures. They have not found an alternative to war, or overcome racial hatred.
Perhaps you will find the mechanisms or answers to these and other problems that still plague mankind. It won't be easy, and it won’t be done by negative thoughts nor by tearing down and rebuilding, nor by belittling.
You may do it; by hard work, humanity, hope, and faith in mankind – and in yourself and others.