BS - Sunday, June 17, 1984 - North Shore News Ei business RETRACTABLE PREFERREDS Look better than they sound ON’T LET the name Retractable Prefer- reds scare you off. They could be the kind of investment you are looking for. “*Retractable preferreds’’ is an abbreviated description of preferred shares in a com- pany which that company agrees to buy back from you at a fixed price at some date in the future. What are some of their at- tractive features? Well, they offer a good, very com- petitive rate of return on your investment through a regular dividend. You have the satisfaction of knowing that you can sell them back to the company for approximately what you paid for them — or a slightly better price. Your invested money is safer than in many other investments because the companies which offer them to the public are generally sound, Jong- established firms, sugh -a& Alcan, Cominco, enial Life and MacMillan$Bloedel. Being preferred shares they take precedure over the com- pany’s common shares as far as dividends are concerned. To add a dab of icing to the cake, the income you recieve qualifies for the Divi- dend Tax Credit — and that (as we have mentioned in several previous columns) Hydro right of way PEOPLE USING B.C Hydro transmission tine rights-of-way for recreation should be aware that many of these areas are located on private land and are not for general public use Hydro has received a number of complaints from land owners throughout the province concerned about trail bikers, four-wheel drivers and hunters using the night of way through = their property Owners can take legal action against trespassers The most frequent com plaints involve gates being left open, resulting in live stock funmng Crops and fences being damaged, hvestock being disturbed and loose, hunters shooting On private property All HB ¢ Ceamsmission Hoy dito line tights of way are located on either private on Crown land, much ol which is teased for agnicultural timber heences Purposes OF as Anybody wishing to use a nght of way must have the consent oof the property owner, the Company on in dividual leasing the property orthe peoper Crown agency Time for fitness is time on Your Side. wD By BILL RYAN literally puts more money in your pocket at income tax time. One strong advocate of retractable preferreds is Chris Tidd of the investment firm Loewen, Ondaatje, McCut- cheon. In a recent investment bulletin he listed 16 retrac- table preferreds which he recommended, and here are a couple of statistics which in- dicate why they merit your attention as possible investments: The average dividend yield from this group of 16 retrac- tables was 10.34 per cent, or an interest equivalent of 15.52 per cent. To explain... because of the dividend tax credit you would have to earn interest of 15.52 per cent to keep as much money, after taxes, as you would earn from the retractables at 10.34 per cent. A guaranteed return of 10.34 per cent is a rather stimulating figure when you consider that Canada Savings Bonds are now paynig 10% per cent and term deposits are paying 10 per cent to 11% per year — and the retrac- tables give you a substantial For information 1752 Lonsdale Get a head start ona new career All phases of women's & men's perming, styling, coloring & special effects taught Registration now for May & June (7 month certificate course) —— Open to pubtic (Mon-Fri 9 00 3 00) Moler School of Hairdressing tax break. As enthusiastic Chris Tidd sees it: The retractables offer “*zero risk, the same as the CSBs, except that the 10% per cent from the latter is ful- ly taxed.’’ The retractables are a relatively new investment vehicle, in terms of popular appeal. The first one became availabky in July, 1981. Bill Ryan eee They ate basically an in- come vehicle; that is, for those who are looking for in- 985-5911 come, as opposedito growth. However, they als® hold the prospect of capital gain. Tidd is so keen dgout the retractables that he states: ‘‘! continue to feel that the ‘cashing in’ of CSBs and maturing GICs (guaranteed investment certificates) would offer substantailly im- proved returns in the retrac- table preferreds and I recom- mend that you give serious consideration to that idea.”’ Just for the record — and for your information — the price of the 16 retractables he recommended as of June 4 ranged from $23 to $27 per share. 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