Returns on GICs and “high-rate” savings accounts have been in general decline for decades. Investors in these low income-generating products now face an uphill battle as inflation accelerates, with countries printing money at an astounding rate. Real inflation numbers are difficult to peg, though we’re convinced that money earning under 3-4% is losing the war.

Investors have rationally responded to low rates and inflation by piling into equities and real estate, pushing each to new heights. This has left many in the enviable albeit somewhat confounding position of having an incredible year financially in the midst of a pandemic.

The question many of this group are asking is “What do I do now?” It’s an important question, though an increasingly difficult one to answer with confidence in the current economic environment. Stock market volatility is making investors hesitant to go all-in at current valuations. Low interest bearing GICs and savings accounts are often a non-starter for the reasons above. Investing in private mortgage funds, commonly referred to as MICs, has been part of the answer for many.

A mortgage fund lends money (secured against real estate) to borrowers that may not qualify for conventional bank financing. Typically, borrowers from mortgage funds pay higher interest rates than they would with a bank. As a result, mortgage funds are often a temporary solution until the borrower can qualify for a lower-rate mortgage.

For investors, mortgage funds have the potential to generate higher income than most fixed income products such as GICs, often targeting returns of 6% or higher. Distributions are typically made quarterly or monthly.
Another attractive characteristic of mortgage investing is defensive positioning. Holding the debt on a property typically carries lower risk than investing in the equity of that property. This is because equity is the first money to be lost if there is a market downturn, giving investors more peace of mind in today’s economic climate.

There are over 200 private mortgage funds to choose from in Canada and many factors can influence their risk and return. These may include the type of property lent against, loan-to-value ratios, the composition of mortgages (1st, 2nd, or 3rd), the quality of the borrower, and the calibre of the fund’s team, just to name a few.

Hawkeye Wealth has extensively researched numerous private mortgage funds to provide investors with vetted options at little to no additional cost, saving them time and helping them invest with confidence.

To learn more about investing in mortgage funds, how to assess risk and return, and how to participate if interested, you can watch our recorded webinar and access an investor package here.

Celebrity investor Kevin O’Leary says he wants to at least double his cryptocurrency holdings by the end of 2021, and predicts that “trillions of dollars” could pour into the market if crypto becomes a new asset class.

The “Shark Tank” investor had previously said bitcoin was “garbage,” but he later changed his mind.

O’Leary, who is chairman of O’Shares ETFs, said he is bullish on crypto and wants to allocate more in his personal portfolio.

“I want to raise my exposure to crypto — currently at 3% — to 7% by the end of the year,” he told “Capital Connection” on Monday…read more.

After years of hesitance, investors are finally warming up to wildfire tech.

Questions around monetization have generally been the reason financiers have avoided startups making technology to help combat wildfires.

According to Ahmad Wani, co-founder and CEO of disaster preparedness company One Concern, VCs tend to disregard business models that depend on governments as primary customers.

“As soon as you go to a venture capitalist and say the words ‘disaster’ or ‘government,’ they say, ‘You are a disaster. There’s the door,’ ” says Wani…read more.