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Mortgage Investment Corporations/MICs as investments?

4733 Views 3 Replies 3 Participants Last post by  leslie
I'm just starting to learn about these. A fee-only advisor suggested them to me. He said that he had 20% personally held in MICs and in retrospect wishes that he was even higher.


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sorry should this be in the real estate forum?
I've written about mortgage investment corporations (MICs) based on what I could find on the web. Even though the review is a bit on the negative side, I've since been contacted by a few MIC investors, and every MIC is different. My largest concern with MICs was the lack of liquidity, but apparently, there are some MICs that allow you to sell relatively quickly.
Assuming you are talking about private companies....
I think you should find another advisor, if he is willing to put more than 20% into such a product.

Ask yourself where mortgage interest rates are heading. They are based on 10-yr treasury yields. Where are those heading? What happens to the value of a fixed income security when interest rates change?

Ask yourself whether Cdn default rates are rising or falling. Remember what happened to a huge outfit in Alberta/bc about 20 years ago because of super-simple fraud. What province are their propertiesin? What is the economy of those provinces?
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