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s tribune december 2 1987c7 be informed about bonds bond funds bonds and bond funds are among the least understood in vestment vehicles in the broker age industry the average stock broker unless he or she special izes in bonds and there are very few that do just doesnt make the time nor have the inclination to become thoroughly familiar with the bond market and its varied products the dictum caveat emptor applies as much to buying bonds as it does to buying stocks or mutual funds when you buy a bond i am not necessarily referring to canada savings bonds you know that at a definite time in the future the bond will reach maturity and at maturity it will pay off at par ie 1000 per bond many times there is a provision to allow the issuer to call redeem the bond before maturity in this case there is a schedule so you know when and at what price your bond may be called you also know that there is a large and active market in bonds and you may sell your bond any business day through your brok er what you receive for it de pends on several factors one of which is of course where interest rates have moved since the time of purchase although the same general rules also apply to closedend in vestment trusts there are impor tant differences of which some brokers are not aware because they frequently have not bothered to read the prospectus the in vestment trusts are simply collec tions of bonds pooled together in groupings of say 20 million or 30 million the collection is then sold in units to individual investors each unit representing a fraction al interest in the entire portfolio two of these products you may have heard of are the monthly in vestment trust mit and the monthly payment portfolio mpp so named because the in terest payments are distributed monthly the bonds in these trusts are not traded so there is an average maturity date for each trust if you hold the trust to maturity you with every cellular phone no down payment prince industries 3185 bathurst street toronto m6a2b2 4167859090 cartel approved acent advertising corrections eatons santa sale insert appearing in the markham economist and sun wednesday november 18 1987 due to supplier delivery problems the following item will not be available page c39 item c santa mug not available inadvertently the error listed above has appeared in our advertising we sincerely regret any inconvenience or confusion to our customers eatons money moxy lavujl gailsi will receive your portion of the maturity value of all the bonds re maining in your unit i say re maining because it is likely that along the way some of the bonds will be called with the resulting cash being then paid out prop ortionately to unit holders thus it is impossible to say exactly how much of your principal you will receive at maturity and how much will be pieced out to you during the life of the trust in the form of early redemptions the sales agent will likely tell you that although the average term to maturity for a newly issued trust is about 10 years you can sell your units back to the dealer at any time what you may not be told however is that the price you will be offered for your units is almost certain to be less than what you paid for them the reason you would likely sustain this capital loss is simple but not widely advertised first ly although you pay no additional commission to sell your units back to the dealer you paid roughly four per cent commission when you bought them this charge is obviously non refundable if you should need to sell secondly bond department employees are involved every time these trust units are assem bled and traded they have to eat too and bond departments have to show a profit it is no coincidence that during bad times in the stock market like now these products appear more frequently if your broker thinks you should own some of these units make certain that both of your understand what youre buying darryl cailes is an independent financial consultant living in gormley a gift of health for christmas i u definitely the lowest priced fitness centre in metro area 60 bullock drive markham phone now for details 2947800