Income Trust Talk

Both give you a sense of the risks and rewards of investing in income trusts today in light of legislative changes initiated last fall.

Our strategy, once again, is to use income trusts as a trading vehicle to achieve capital gains, not to fool ourselves into believing that trusts are a reliable source of higher-than-average income. We’ve never felt that way… even before “Flimflam” Flaherty decided to reverse his party’s election promise.

Any income we accumulate is treated simply as an offset against trading costs, including commissions.

If you’re simply interested in low-risk income, we suggest you look beyond this site, and beyond income trusts altogether.

Having said that, you have another decision that you can make… get political or ignore the politics?

If you got seriously burned last fall by Flaherty’s Halloween prank and saw a big chunk of your retirement funds disappear, you might want to join the battle to have the legislation reversed or altered. No one expects this new government to last very long; and even if it does, there’s a growing list of incompetencies that may force Flaherty to step down anyway. That could open an opportunity to revisit income trust legislation.

So, if you want to get active and you’re not already a member of CAITI - the Canadian Association of Income Trust Investors - now is the time to visit their web site and sign up. It doesn’t cost anything and you get all the latest info on what’s happening on the political front.

Here’s an excerpt from the latest CAITI newsletter on one call-to-action…

The Liberals are very serious in their dedication to reverse this ill-conceived policy and they intend to maintain the profile of this issue for as long as it takes. That is why they are organizing a nation-wide drive for petitions. This is the most important thing each of you can be doing at present within your respective communities and amongst your circle of family, friends and co-workers. Please go to http://w3.4kci.com/maestro/link/1006560665/3/60582/105280052/2/2134330/1/7/7/-/lnk.htm to download a copy of the petition. A completed petition requires the signatures of 25 Canadians. Each completed petition will be read into the record in the House of Commons. The person who completed the petition whose name appears on the first line will have their name read into the record and recorded in Hansard. These individuals will be mailed a copy of the Hansard record that includes their name. In the file I have included one page of the 18 pages of blacked out documents that were provided under the Access to Information Act. This is Harper’s idea of transparency and accountability.

Now the government has asked for them back. It’s obvious why, as they reveal much that supports our case and refutes totally their false assertion about tax leakage. This is a powerful visual for those who you will be asking to sign the petition.

The value of the petition is maximized if you use it as a tool to broaden the level of awareness about this issue with as many people as possible. I know of no Canadian who does not believe strongly in a Government that is open, transparent and accountable. At the very least every Canadian should object to 18 pages of blacked out documents as the sole justification for a broken promise that cost Canadians $35 billion in their life savings. I am not sure that even a dictatorship would get away with that, so why should it be tolerated in Canada?

CAITI also organizes and promotes local Town Hall Meetings where people concerned about income trust issues can get together face-to-face. Their latest announcements include…

Wednesday, May 23 - Queensville, Ontario at the Queensville Community Centre, 1590 Queensville Side Road. Start time is 7:00 pm. For more information, please contact Esther Shaye at (905) 693-0166.
Thursday, May 24 ­ Cambridge Ontario at the Future Inn (Dorset Room), 700 Hespeler Rd. Start time is 7:00 pm . For more information, please contact Esther Shaye at (905) 693-0166.
Wednesday, May 30 - St. Thomas, Ontario at the St. Thomas Seniors Centre,
225 Chestnut Street, St. Thomas. Start time is 7:30 pm. For more information, please contact Esther Shaye at (905) 693-0166.
Tuesday, June 5 ­ Ottawa ­location to be announced, please contact Esther Shaye at (905) 693-0166 Thursday, June 7 - Fenwick, Ontario at the Fenwick Lions Hall, 999 Church Street in Fenwick. Start time is 7:00 pm. For more information, please contact Esther Shaye at (905) 693-0166.
Thursday, June 14 ­ Burlington, Ontario at the Burlington Seniors Centre,
2285 New St. Start time is 7:00 pm. For more information, please contact Esther Shaye at (905) 693-0166.
Thursday, June 21 - Windsor, Ontario - location to be announced, please contact Esther Shaye at (905) 693-0166

So, now you have some options to help with the battle.

Meanwhile, your investment dollars are not being wasted when applied to income trusts, as last week’s update clearly showed. There is still money to be made, and our unconventional approach to taking you in that direction might help. Just don’t forget that we’re offering information for independent investors who make their own decisions. We’re not an advisory service.