Why Should You Invest an a MIC
Investing in a Canadian Mortgage Investment Corporation (MIC) can be an attractive option for those looking to diversify their investment portfolio. A MIC is a type of investment company that pools the money of investors to lend to borrowers in the form of mortgages. In this blog post, we'll discuss the advantages of investing in a Canadian MIC.
Steady Income One of the main advantages of investing in a Canadian MIC is the steady income it can provide. MICs generate income by collecting interest on the mortgages they hold. Unlike stocks, which can fluctuate in value, MICs generally offer a predictable stream of income. Many MICs pay out monthly dividends to their investors, making them an attractive option for those seeking regular income.
Diversification Another advantage of investing in a Canadian MIC is the diversification it can provide. As mentioned earlier, MICs pool the money of investors to lend to borrowers in the form of mortgages. This means that investors are exposed to a wide range of mortgages, which can help to spread out risk. Investing in a MIC can be a great way to diversify your portfolio and reduce your overall risk.
Low Correlation to the Stock Market MICs have historically had a low correlation to the stock market, which can make them a great addition to any investment portfolio. This means that even when the stock market is experiencing volatility, the value of a MIC investment may not be impacted to the same degree.
Higher Returns MICs can offer higher returns than other fixed income investments such as bonds or GICs. This is because the interest rates on mortgages tend to be higher than those on other fixed income investments. Additionally, MICs may offer higher returns than traditional real estate investments, as they are not subject to the same management and maintenance costs.
Professional Management Investing in a Canadian MIC means that your money will be managed by professionals who have experience in the mortgage lending industry. This can provide investors with peace of mind, as they can trust that their investments are being managed by experts who have a deep understanding of the mortgage market.
In conclusion, investing in a Canadian Mortgage Investment Corporation can provide investors with a steady income, diversification, low correlation to the stock market, higher returns, and professional management. If you're looking for a way to diversify your investment portfolio and generate steady income, investing in a Canadian MIC may be a great option for you. As always, it's important to do your own research and consult with a financial advisor before making any investment decisions.
