Colliers’ Income Strategy Developed by Mark J. Grant

Colliers’ Income Strategy Developed by Mark J. Grant

Colliers’ Securities Mark J. Grant, Chief Global Strategist

When evaluating a client’s best interests and other regulatory requirements, the first step in considering Colliers’/Grant’s Income Strategy for clients is to carefully assess the client’s specific financial situation, goals, objectives, investment time horizon, and most importantly, their respective risk tolerances. Following this analysis, I compare the client profile with the parameters of my income strategy. If they do not match, I will respectfully suggest the client seek financial services elsewhere.

Assuming the client financial goals, objectives and risk tolerances match up with Colliers’/Grant’s Income Investment Strategy, I use various securities, including exchange traded funds, exchange traded notes, some real estate investment trusts (REIT’s) and closed-end funds, to try to secure monthly income. This is critical. All the securities I currently use should pay monthly income, (there are always risks associated with investing including possible loss of principal), but I try to secure monthly income. All these securities are listed on public stock exchanges, no hold backs, of any kind, and I utilize funds where there is a decent amount of liquidity. There are thousands of these types of funds, and I regularly watch the markets performance for these securities. I am currently following about 70 securities, utilizing around 17 in client portfolios. They ALL currently pay income monthly, providing cash flow to use each month for expenses, or money to reinvest each month, or a combination of both, allowing the account holder to make that monthly decision, depending upon their respective needs.

Every month it is not only your choice to reinvest some, or all of the money, but where to reinvest it, as the holders of these securities receive cash payments. I check with my institutional and individual clients each month to see what they want to do, as their cash becomes available.

Two things must be stated. One, past performance does not guarantee future results. Two, the funds and notes can raise or lower their dividends, or pay-outs, at will. I keep a close eye on this but there are no guarantees. I currently favor covered call products as they do not own the underlying assets, (but the underwriter of this strategy will forgo upside potential of the underlying asset), but just write calls upon their movement and most do not utilize leverage, of any sort. Money, therefore, can often possibly be made regardless of the appreciation or depreciation of the asset, depending upon the manager’s abilities.

An income stream, in my opinion, is quite valuable for seniors, retirees, pension funds, university endowments, or any other entity that has liabilities as part of its structure. While it should be noted that the securities that I use have expense ratios, or internal fees, that I do not receive any part of those fees. Since I do all of the homework, personally, I charge everyone a commission for execution, but no monthly fee.

While the current market value is down in most of these securities, given the markets these days, this does not affect your cash flow, unless you need to sell for some reason. Consequently, unless there is some major problem, the principal value can rise, month after month, resulting in the compounding of interest, although it can possibly fall in value as well. Assuming there is more income next month than last month, it is possibly a growth proposition.

This is also why I am very focused upon diversification of the securities as issues have arisen such as oil going to zero some three years ago in March. Everyone’s portfolio requires diversification, in my viewpoint, and plenty of it. This means a careful examination of what produces the income and even then, diversity does not guarantee investment returns and though it minimizes the risk, in my opinion, but it does not eliminate risk.

The goal of my strategy is monthly income. Also, it should be pointed out that almost none of the securities that I utilize are covered by the rating agencies, and so I dig down, and further down, to assess the quality of the securities that I decide to use. A tremendous amount of homework is required, and I do it day after day, and week after week. I am quite aware of my responsibilities to my clients. It is odd, in a way, that Wall Street focuses so much on appreciation and so little on income. Of course, in the past, income was the purview of the bond markets but with inflation at present levels almost no bonds, of any sort, pay out at levels higher than our current rate of inflation and, if they do, it is with a large amount of “credit risk,” in my opinion. Perhaps this will change, and then I will readjust my strategy, but that is where we are, in my estimation, at the present time.

Finally, at least annually, I review with the client their specific financial situation, goals, objectives, investment time horizon, and most importantly, their respective risk tolerances, making sure their best interests are still being met by the Grant’s Income Investment Strategy.

If their profiles have changed, so as to not match my income strategy, I will respectfully suggest the client seek financial services elsewhere.

What can be said, with certainty, is that after 49 years on the playing field, I am still here, and I have no intention of going anywhere. God willing. Any questions, or comments, you are welcome to contact me. I hope this helps to explain “Colliers’/Grant’s Income Investment Strategy.”

Mark J. Grant

Chief Global Strategist

Colliers Securities

[email protected]

U.S. 954-999-0933 Exchange-Traded Funds (“ETFs”) and Exchange-Traded Notes (“ETNs”)

Disclosures:

To the extent this communication contains information pertaining to ETFs or ETNs, consider the investment objectives, risks, and charges and expenses of the ETFs and ETNs carefully before investing. Each U.S. Registered ETF and ETN has filed a registration statement (including a prospectus) with the SEC which contains this and other information about the ETF or ETN as applicable. Before you invest in an ETF or ETN, you should obtain and carefully read the prospectus in the registration statement and other documents the issuer has filed with the SEC for more complete information about the product. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov . Alternatively, you may obtain a copy of the prospectus for specific ETFs and ETNs by contacting your Colliers Securities LLC, representative.

ETFs are redeemable only in Creation Unit size aggregations and may not be individually redeemed; are redeemable only through Authorized Participants; and are redeemable on an “in-kind” basis. The public trading price of a redeemable lot of the ETFs may be different from its net asset value. These ETFs can trade at a discount or premium to the net asset value. There is always a fundamental risk of declining stock prices, which can cause losses to your investment.

Some leveraged and inverse ETFs and ETNs “reset” daily, meaning that they are designed to achieve their stated objectives on a daily basis. They will therefore realize each day a loss or a gain which is a multiple (for leveraged ETFs and ETNs) or the inverse (for inverse ETFs and ETNs) of the performance on that day of their underlying index or benchmark. For this reason, if they are held for a period longer than one day, their performance over such longer periods of time can differ significantly from the stated multiple of the performance (or the inverse of the performance) of their underlying index or benchmark during the same period. This effect can be magnified in volatile markets. Prior to entering into a transaction in leveraged or inverse ETFs, you should be aware of the general risks associated with such transactions. You should not enter into leveraged or inverse ETFs transactions unless you understand the nature and extent of your risk exposure. You should also be satisfied that the leveraged or inverse ETFs transaction is appropriate for you by considering your circumstances and financial condition.

ETFs and ETNs that are linked to commodity futures do not offer direct exposure to the commodity’s spot price and may perform differently than the spot price for the commodity itself. Performance differential can be magnified if a specific condition persists in the market for a commodity that creates a disparity between near-term future prices and long-term future prices and may lead to unexpected performance results. Other factors, such as roll yield, transaction costs, management fees, and taxes may cause deviation in performance between the spot price of a commodity and commodity futures. You should not assume that an ETF or ETN that is linked to commodity futures will provide an effective hedge because of a negative correlation with equities or other asset classes. You should always be aware of the general risks associated with investing in the commodities market and the futures market before investing in an ETF or ETN that is linked to commodity futures.

Closed End Fund Disclosure:

A Closed-End Fund issues a fixed number of shares through a single initial public offering (IPO) to raise capital for its initial investments, and no new shares will be issued by the fund after its initial public offering. Closed-End Funds are subject to volatility, less liquid than open-end funds, available only through brokers and may be heavily discounted. Please consider all investment objectives, suitability, fees, and risk tolerance before investing. Investors should discuss with their financial representative if this investment is right for you.

Real Estate Investment Trust (REIT) Disclosure:

A REIT is a company that owns, operates, or finances income-generating real estate. REITs pool the capital of numerous investors, making it possible to pool capital of numerous investors. REITs typically have low growth, dividends are taxed as regular income, are subject to market risk, and typically have high management and transaction fees. Investors should consider all investment risks, fees, objectives, suitability, and risk tolerance before investing, and talk to their financial representative about if this investment is right for you.

“Before an investment is made in any security, fund or investment, investors are strongly advised to request a copy of the prospectus or other disclosure or investment documentation and read it carefully. Such prospectus or other information contains important information about a fund or securities investment objectives and strategies, risks, and expenses. Investors should read all such information carefully before making an investment decision and consult with their financial representative before buying or selling in any security, fund, or investing in any other investment vehicle. All investing involves risks, including the loss of principal. Information herein is for general use; is not unbiased/impartial; is current at publication date, subject to change; may be from third parties; and may not be accurate or complete. Opinions are the author’s, not Colliers Securities Inc., or their respective affiliates or subsidiaries. This is not a research report or solicitation or recommendation to buy/sell the subject securities. Investment factors are not fully addressed herein. Colliers Securities and their affiliates may have a proprietary position in the subject securities. Redistribution/reproduction of this material is prohibited.

Colliers Securities LLC, is a full-service broker-dealer and investment adviser.”