WFP SECURITIES & WESTERN FINANCIAL ADVISORS |
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Product Definitions
Stocks Stock types range from blue chips to penny stocks and signify ownership (equity) in a corporation, and represent a claim on its proportional share in the corporation’s assets and profits. Most stock also provides voting rights, which give the shareholder a proportional vote, which is determined by the percentage of ownership, in certain corporate decisions. Not all companies have stock. Such companies as; sole proprietorships and limited partnerships do not issue stock also called equity or equity securities or corporate stock. Stocks offer you a great deal of flexibility to take control of your investments and are a great solution for the active investor. Bonds A Bond is a debt instrument issued for a period of more than one year with a promise to repay the principal (initial investment) along with interest on a specified date (maturity). Even though some bonds do not pay interest, all bonds are required to repay principal. When investors buy a bond, unlike the case of equities, ownership rights are not gained as he/she becomes a creditor of the issuer. Riskier bonds will typically provide a higher payout to compensate for that additional risk. Where as some bonds are tax-exempt, which are typically issued by municipal, county or state governments. WFP Securities can help you find the right kind of fixed income product to meet your goals and financial objectives. ETFs Exchange Traded Funds (ETFs) are a type of fund that bundle together individual securities that are in an index, i.e. Biotech, Oil, Real Estate, Spain, Germany, etc, but can be traded like a stock in almost all aspects, such as short selling. They can be bought and sold at any time during the day, unlike most mutual funds. ETFs also provide tax savings and typically have low operating and transaction costs. Money Markets and CDs Money Markets and Certificates of Deposit (CDs) are both considered to be relatively low risk investments offering a lower return on your money. Money markets invest in short-term securities, such as banker’s acceptances, commercial paper, negotiable certificates of deposits, and T-Bills with a maturity of one year or less. They are appropriate for temporary cash storage for short-term time horizons. CDs are short to medium-term, interest-bearing investments offered by banks and savings and loans, which are FDIC insured. Mutual Funds An open-ended mutual fund raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Money is raised by selling shares of the mutual fund to the public (investors) in the same fashion a company sells its stock to the public. Mutual funds can invest in such vehicles such as stock, bonds, and money markets. Types of mutual funds include, but are not limited to: aggressive growth, asset allocation, income, international, index, sector, municipal bond, etc. Some of the benefits of investing in mutual funds include diversification, professional money management, liquidity and convenience. Mutual funds are actively, professionally managed, so you can be comfortable knowing that someone with experience and expertise is buying, selling, and watching your investment. WFP Securities offers a wide array of mutual funds. Please feel free to contact us to discuss how you can benefit from investing in mutual funds. Annuities and Life Insurance An annuity is designed to provide payments to the holder at specified intervals, usually after retirement. The holder is taxed only when they start taking distributions or if they withdraw funds from the account. Fixed and variable annuities are tax-deferred, which means the earnings from the investment(s) in these accounts grow tax-deferred until withdrawn, which is penalty free if withdrawn after a certain age. Fixed annuities guarantee a certain payment amount, while variable annuities do not, however they do have potential for greater returns. Another benefit to annuities is the death benefit, which can be equivalent to the higher of the current value of the annuity of the amount the buyer has contributed to the annuity policy. The primary purpose of life insurance is to basically serve one function, which is replacing the income of the breadwinner due to premature death. It is to help the burden of financial responsibilities such as a mortgage, raising a family, and having dependents. Different types of life insurances are: Term Life, Permanent Life, Whole Life, Single Premium Life, Universal Life, Variable Life, and Variable Universal Life. DIRECT PARTICIPATION PROGRAMS WFP Securities provides all standard products listed above, however we also specialize in direct participation programs (DPPs). We have working relationships with vendors across the A Direct Participation Program (DPPs) is a business venture designed to let investors participate directly in the cash flow and tax benefits of the underlying investment. DPPs are passive investments to include the following and many are designed specifically to benefit high net worth individuals. TICs A TIC (Tenant-In-Common) allows owners to hold an undivided, fractional interest in a property, but gives them all of the same rights as a single owner (unlike partnership real estate, where amount of equity involved determines how much control an individual has). Typically, a syndicated TIC interest is considered a security. A TIC provides the benefits of single ownership without tying all of your capital in one investment and requiring your time to manage the property. Instead, professionals handle the hands-on property management, and the low minimums to participate allow you to diversify between a number of properties or other types of investments. The cash flow is generally monthly, and may be partially sheltered due to interest deductions and depreciation, which provides an excellent option for investors concerned with income. Finally, as a vehicle for deferring capital gain via a 1031 exchange, it can offer superior tax efficiency. §1031 Exchange A §1031 tax-deferred exchange allows you sell a property used for trade, business, or investment purposes, and exchange for a like-kind property also to be used for similar use. The entire amount of equity received from the sale may be used to acquire more property, rather than having to deduct money to pay for capital gains taxes. Instead, the capital gains taxes are deferred until later, allowing you to invest more money and preserve your equity. REITs A real estate investment trust (REIT) is a company that offers shares in income-producing real estate and provides steady dividends. Some REITs are freely traded on the stock market, while others require direct participation through a prospectus and a brokerage firm specializing in direct participation products. Benefits include steady streams of income and the possibility of capital appreciation over time. An additional advantage is the lack of correlation between the general stock market returns and REIT returns, which increases balance and minimizes risk for stock portfolios. Unlike other ways to invest in real estate, there is no property management required of individual investors, making REITs the easiest way to invest in real estate. Furthermore, REIT portfolios are professionally managed by industry experts, ensuring that you can focus on what matters most to you. Note Programs Investing in direct participation note programs is an easy way to partake in profitable business ventures such as medical receivables and equipment leasing. Programs generally offer a variety of terms the program will last and a corresponding rate of return (the longer the program, typically the higher the return), allowing you to choose the term that is best for your goals. Given the variety of different note programs out there, investing in different types of businesses is possible, further increasing diversity and minimizing risk. Additionally, the rate of return is usually quite competitive, offering a solution not correlated to the stock market. Oil & Gas Programs Oil and gas investment is becoming increasingly popular as energy demands increase, and direct participation products allow for individual investors to be a part of this increasingly profitable industry. This profitability makes investing in oil and gas programs an appealing option. In addition to the increased valuation, however, there is an additional incentive because of the 
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Securities offered through WFP Securities Corporation, divisions: WFP Securities and Western Financial Advisors. Member FINRA and SIPC This communication is strictly intended for individuals residing in the states of AK, AL, AZ, CA, CO, CT, DC, FL, GA, HI, ID, IL, IN, KS, KY, LA, MA, MD, MI, MN, MT, NC, NE, NH, NJ, NM, NV, NY, OH, OR, PA, SC, SD, TX, UT, VA, VT, WA, WI, and WY. No offers may be made or accepted from any resident outside these states. IMPORTANT CONSUMER INFORMATION: A broker/dealer (BD), investment adviser (IA), or IA representative may only transact business in a state if first registered, as appropriate. Follow-up, individualized responses to persons in a state by such a firm or individual that involve either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without first complying with appropriate registration requirements, or an applicable exemption or exclusion.  |
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