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*â€" ’ *- mm-Mhtsnu-u m I l. The trouble with interest rates " ixed income investments _. For example. if interest rates Corporate bonds typically perform '~ . F savings accounts. bonds. increase by just 0.25 per cent. the well in a stable economy but dur- I mortgages, tubing, Guaran» value of a long-term bond could ing economic crises there is more ‘ " "‘ ‘ ‘ . " ; teed income Certificates and the drop by more than one per cent, risk that high-yield bond issuers ‘ w 1 like â€" are typically viewed as “safe while a short-term b0 d would will become insolvent. That creates . .3 , . . . . . ' haven'I investments by typically see a much snkgdrop volatility in high-yield bond pm i‘ . ‘ ‘ ~ m. 1 many investors. in value. ' and results in a flight to quality ’ ‘ ‘ ‘ m“ 1 And for the past 30 \1 \l\ l \ . If interest rates investments and risk-free assets " ‘ ‘ ‘ ‘ my : years or so, bonds espe- experience a steady likerTâ€"Bill‘s or perhaps Canadian 3 - t cially have enjoyed an \l()\ [\ rise. income from government bonds, further reduc- . . 1 almost uninterrupted ., bond mutual funds ingthevalueoflowercreditquality : period of steady. if not 3‘ ,. , will eventually assetssuchashigh-yield bonds. ‘ } spectacular. growth. a climb as fund man- Any way you look at it. volatility ‘ ‘ < But with'interest rates .- 3 z agers find greater and lowyieldsareexpected to con- i sitting at historical lows, ' i Q 1, value by adding tinue in the bond market forsame I there is likely little oppor< it » ' r, . bonds with higher time. l tunity left for further - 3 ‘1 ‘1 yields, which will Even so. investors should still appreciation in the price help to slowly View fixed income investments as of bonds. A rebqu income lev- an important asset class to manage . So. what can you ; els and provide bet- marketrisk. ‘ expect from an investv ‘ ter volatility protec- The cost for this relative Stablll- . merit in bonds? That tion. ty is its lower long-term growth - depends on whether inflation expec- potential, which makes portfolio interest rates begin to go W " " ' ' tations can also diversification among all asset _ up or remain flat. Let's take a closer produce bond market volatility. classes â€"- cash. stocks. equity '9’" bring your gun. to 32,” . - - look. Inflation usually leads to higher mutual funds. bonds and other . us OWN COMMUNITY NEWSPAPER . 51 ; if interest rates rise. expect interest rates and even the expec- fixed»income investments â€" the 1 _ __ . . _ , increased volatility in bond prices. tation of an inflationary period can key to successfully reaching your . ”an“ A5 interest rates go UP- new bonds drive down bond prices well in long-term financial goals TERL O ‘ C RON] e are issued at the higher rate_ mak~ advance of an actual interest rate Talk to your professional advi- ’ ' ing them more attractive than change. sor about how to keep your finan- existing bonds. lf interest rates remain flat or cial life safe and balanced come ‘ , k x A: ‘ . .. , . For example. if you buy a bond fall. cash flow from bond interest what may. 5 ’ ‘ HQ”; . - . that yields five per cent interest flatlines 01’ declines. making it -« an “~51 ” 1;“ . 7 .3496 and interest rates rise to six per more difficult to achieve your Thisoalumn l'sprouidedby +5.74” ' cent, your bond will be worth less financial goals and effectively elim» MCBu‘hm'e Group Private , x . 5M7“ because new investors are getting a inating protection against price Wealth Management 7. ‘ = wmg'm better yield. ' increases. Conm RussMcEadmie Keep in mind that the impact of Faced with low interest rates, GRCMCDFA ‘ ’ ' interest rate changes on existing some investors choose to move to 0‘51me241 M" ftw Messaging; m - 1* Neon- bonds depends on the type of higher yielding corporate bonds in L ornmellmceachnie ‘A'r'r W :5'"‘\.i:,â€"_.._4 5'3; 1” ~ , lg ‘1 If; "H. ' .' V: a” {‘3 bond you invest in. hopes of increasing their income. @inmmngrouncom T 5‘5“," . I i ’ 3:J if: .1 ‘ ’ ' . ~ Q I ‘ . Tax advantages of sole propr1etorsh1p : am often asked by struggling to decide keepingandtaxfillngserv- § I lth \ ( ll 1 ll I new business owners be‘tween‘sole proprietor- ice with others working for Y0 U r m 0 rtg a g e ‘ ‘ ‘ r , . . whether they should ship and incorporation. him. 916:“.th M”. Li. ,‘ a i HUS. BUSl \ lSS start as a sole proprietor Here is what 1 tom him I fill“ asked him how he or corporation, to help settle the matter. felt about the risk or liabili- #5?! Most of my clients He was starting up a ty the business would ‘ '_ 3- choose first to register bookkeeping service that expose him to. He said that ‘ I? . their business as a sole he wanted to run out ofhis the nature of his kind of 1 ,. proprietorship. home. He was not plan- service was quite low risk. 1 There are many nling to etr‘nplttw anyone and thatblge was not con. 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