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20 NORTH LEEDS LANTERN JUNE 1990 NOW! WHAT‘S IT GOING TO COST ME? by Gary W. Beckman, B.A. Frequently, and justifiably so, Financial Advisors are queried by investors as to what costs will be incurred for transactions. Presumably, investors ask such questions of all representatives of financial services institutions. My experience is that these questions are most appropriate. They usually arise from investors who are beginning to search for investment products beyond the familiar, but limited, realm of savings accounts, guaranteed investment certificates and Canada Savings Bonds. Every business undertaking must address the aspect of establishing costs for the sale of goods and services to buying customers. The investment industry is no exception in its business undertakings with the investing retail clientele. For those who seek noâ€"cost retail investments, the alternatives, unfortunately, are quite limited. There are acquisition and disposition costs of investment transactions that must be paid; although, sometimes they can be hidden. Ultimately, however, someone must absorb costs of doing business. I propose to offer a brief commentary on retail investment costs in a two-part article. Let's look at your investment costs as they are structured in relation to typical investment products that are purchased. A categorization of investment costs can then be generally made in terms of: finder‘s fees, discount pricing, and commissions. (1) FINDER'S FEES â€" This costing approach includes products such as Canada Savings Bonds and guaranteed investment certificates. Basically, you incur no direct cost for the purchase or sale of these securities. However, your financial institution will receive a finder's fee for undertaking the transaction. For instance, many think that the purchase of C585 is a "free", no-cost investment. Actually, the Bank of Canada â€"â€" on behalf of taxpayers â€"- must pay fees to all financial institutions for selling CSB product. (2) DISCOUNT PRICING - This approach typically includes products such as bonds, treasury bills, mortgage-backed securities, stripped coupons, debentures and discount notes. For instance, if you wish to buy part of a new provincial bond issue of specific coupon yield and maturity, it will be priced to the market. This pricing will afford the bond an attractive yield in the competing market place. Your financial institution will quote you a price. If the price attracts you, the institution will confirm the order to you with no additional costs, other than perhaps some accrued interest. Your likely question from this discount pricing example could be: "How does the financial institution make any profit if I have no costs assoc1ated with the transaction? " The answer is that the institution will have bought a very large amount of these bonds from the issuer, say, a province. It will have paid somewhat less for these bonds than the price you pay. Note that these prices frequently could be less than what the bond will be worth at its maturity; thus, discounting. The concept is one of the candy store variety. A merchant normally does not give lollipOps away! He will have purchased many cases of lollipops from his supplier at a wholesale (discounted) price. When the merchant retails them to his customers, he sets a higher price for each lollipop. This marked-up price will cover his cost of the lollipops' purchase price, the costs of their sale, and a profit factor which is essential for the merchant in order to carry on his business and to earn a living. Sometimes, when sales are slow, the competition is strong, or the lollipops are losing their flavour, the merchant can choose to briefly reduce the prices of his lollipops to increase sales. Discount pricing is a standard element of the investment marketplace. ...See Part II next month... (Garry W. Beckman is a Financial Advisor with Midland Capital Corporation, Ottawa branch, at 1-800â€"267-9345. He serves residents of the Rideau Lakes.) KR No.1. Portland. Onlulo KOC IVO (613! 212-2200 "Be Keen; Think Green!" â€" that's the message that visitors to Rideau Centennial School got as students dug deeply into Earth Week activities, all part of Environmental Awareness Month in April. One poster on display urged each of us to be an "Earth Preserver. " The J K-Gr.4 classes learned how important it is to reduce, reuse and recycle. Students studied ways each of us can help. "Garbageless" lunches and composting, yard cleanâ€"up, raking and tree planting were addressed by many classes. More than 40 Students and several adult supervisors took part in cleaning the ditches of neighbouring township roads. Bags and bags of garbage were collected. The week of May 7-11 was Forestry Week, an appropriate followâ€"up to April's activities. As part of our environmental unit and to recognize the part that trees have in reducing pollution and soil erosion, we gave each student and staff member a white pine tree to take home and plant. Our Rainforest Collection amounted to $25.00, enough to protect 1 acre of tropical rainforest in the Amazon. Primary and junior students made individual donations; the rest of the money came from returning bottles collected during our Ditch Clean Up. Hopefully this initial interest will grow in the future. Since September, ‘10 RC5 students .have been taking ballet, jazz and tap dance lessons here at the school from the Ottawa Dance Academy. On April 26, 34 students took the exam. The examiner came from the British Academy of Dance in England. The results confirmed that the participating students have worked hard, been highly motivated, and have been rewarded with an extremely high degree of success. All of our participants received grades of Commendable or Highly Commendable, both categories signifying a great achievement for the youngsters. On the most recent P.A. days, Leeds-Grenville teachers attended several workshops dealing with the very high incidence of physical, sexual and emotional abuse. One of the factors contributing to violence seems to be the quality of TV, music and videos to which children have access from a very young age. Assistance is available for both victims and the abuser, through Children and Family Services, Family Focus and Interval House. The School Fun Fair, held on Friday, May 25, was a great success. The "Pirate" theme was in evidence everywhere and seemed to have been a popular one with the youngsters. A special vote of thanks and congratulations to the executive of the School Committee, Penny Capell, Margo Welch, Peggy Bond and their team of planners for all their efforts on behalf of the students, not only for the Fun Fair, but also throughout the year. Shorts: * Welcome to Sheila Groenke who is now teaching our Grade 3/4 class in place of Mona Long who is on maternity leave. * Mrs. Long brought her new baby girl, Sarah, back to her class and was greeted with a cake and gifts. * Kindergarten Registration was held at the beginning of May. 19 Junior Kindergarten and 3 new Kindergarten students enrolled. *As part of the Children's Literature unit which the primary children studied, the JK-GrA classes attended the “Wizard of 02", a live presentation at the Brockville Arts Centre. Following the play, the children and their teachers enjoyed a picnic in the park. *The date for Grade 8 closing exercises in June 25. SELLING ALL GRADES OF: Carpet &_Viny| Quarry Tile Ceramic Tile e... at REASONABLE PRICES Call Anytime 387-3235 Ask for FREE Estimate The Rideau District Chapter of the Diabetes Association are holding a Pot Luck Bar-B-Que at the home of Marjorie Jackson,Highway 15, North of Elgin on June 25th at 6.00 p.m. All interested persons and members are invited to attend. Please bring along a lawn chair and your favourite legal food. OFFICE: 342â€"7093 NEVLISTING 283*2200 l 1. Ideal bed and breakfast, former tourist lodge within view of Wiltse Creek, at the Outlet of Charleston Lake. great potential, asking $149,900. 2. Privacy plus! Your own lakefand approximately 200 scenic acres within 25 miles of Sharbot Lake frontage on two roads, financing available at $300,000. 3. Three one acre building lots near Bass Lake, priced at $7.900 each. $89,900 will purchase a large four bedroom Athens home, on a corner lot with asumable mortgage at 11%. $59,900 should obtain for you"approx- imately 60 acres on Murray Road near Spring Valley, financing available at 10%. $54,900 buys approximately 1 14 acre hobby farm on Jellyby Road within 12 miles of Brockville. $89,900, approximately 50 acre sub- division, Elgin area, frontage on two roads and within one mileoi Sand lake (Rideau System). Financing available up to $75,000. 399.900. hobby farm, approximately 133 acres, on paved road within 2 miles of Portland on the Rideau. $75,000, lot 70x210' overrlooking St. Lawrence River, near Brockville Coun- try Club. $50,000, approximately 6 acre lot with an excellent view of the St. Lawrence River, near Mallorytown Landing park. LOTS AND MORE LOTS in the Algon- quin, Delta, Mallorytown, Lyn, Frankville, Elgin and Toledo areas. priced from $7,900 to $30,000. RECREATIONAL LAND in the Athens. Frankville, Mallorytown, Delta andEIgin areas. Your choice from $20,000 to $60,000. STARTER OR RETIREMENT HOMES in the Athens and Frankville areas, $59,000 to $99,900 CALL DEL WILS'ON RES. 928-2734 OR BONNIE MOSS RES. 924-2129 SALES REPRESENTATIVE AN D R EPAIRS STEAM CLEANING! Satisfaction Guaranteed l l l l