How is Liquidity Maintained in your Investment Portfolio?
Liquidity in any investment portfolio is key to increase your chances of receiving a healthy return and to combat the volatility that exists in most markets.
What is Liquidity?
The concept is simple. Liquidity refers to the degree to which an asset or security can be quickly bought or sold without affecting its price. Ultimately, it’s how quickly an asset can be converted into cash.
No matter the strength of your portfolio or whether you’re working with a Mortgage Investment Corporation (MIC), the ability to liquidate assets is not one that should be overlooked.
Why Does Liquidity Matter in an Investment Portfolio?
There are a ton of valid reasons as to why an investor would want to liquidate an investment or their portfolio. They feel the asset or stock is about to depreciate, they have other financial needs or potentially it could be due to the emergence of other financial opportunities. Whatever the reason, maintaining liquidity is prudent and advisable.
How is Liquidity Maintained?
Liquidity is typically determined by the general makeup of your portfolio. Bonds are easier to liquidate then commercial real estate. Company stock traded on any market are generally also easy to liquidate, so an investor could fill their portfolio with company stock knowing it could be sold with relative ease.
Any investment with a term has additional appeal, therefore investing in mortgages on a 12-month term is a strategic course of action. It will ensure you maintain liquidity while still being able to invest in desirable markets.
Working with a MIC can Strengthen your Portfolio in Terms of Liquidity
A MIC can help investors achieve maximum liquidity which in turn can strengthen a portfolio. Real estate is typically considered a wise investment but isn’t exactly known for its liquidity. Attaching a term allows for investors to maintain liquidity while also investing in something solid like private mortgages.
Mortgage Company of Canada
The Mortgage Company of Canada Inc. specializes in lending to specific sectors of the mortgage market, historically those under serviced by private and institutional lenders in terms of loan type, amount, and geographic location.
Throughout periods of uncertainty, Mortgage Company of Canada has maintained its focus on a number of critical underwriting criteria that have managed the portfolio’s overall risk. As an alternative investing strategy, this has allowed us to generate positive returns no matter what the broader market is doing.
To find out how you can diversify your investment portfolio with Canadian real estate mortgages, contact Mortgage Company of Canada Inc. at 905-886-5352 or by e-mail at investor.relations@mcoci.com