Nervous Investors and the Plunge of the US Market

Nervous Investors have hurried the decline in the North American stock market.   As a result of Lehman Brother’s bankruptcy declaration, the merger between Merrill Lynch and the Bank of America, and the bail out of AIG by the US Federal Reserve, investors are selling off their stocks and shares in US companies and as a result, the stock market is plunging.

Toronto’s TSX composite index closed down 349 points to its lowest level in two years and in New York the Dow Jones lost 449 points while the Nasdaq fell 109 points. 

Morgan Stanley – one of the last two big independent investment banks remaining on Wall Street saw its shares fall 24 percent.  Manulife Financial was down 6 percent and shares in Sun Life Financial slid 8 percent.

While the US Market is being hit hard by these sharp declines in stock values, Finance Minister Jim Flaherty said yesterday that “Canadians have nothing to fear as the chaos in financial markets continues south of the border.”

He continued to say that “we get a lot of American news in Canada and I think sometimes Canadians understandably get very concerned about problems that are actually primarily taking place outside of our country”.*

Canada has strong economic fundamentals and a government that has been prudent and pro-active.  The Canadian government anticipated the US bubble would burst over a year ago and the crisis this week was not surprising, nor unexpected.  It is however, not expected to affect Canada to anywhere near the extent it has affected the US. 

There is no direct tie between the US housing market and the Canadian housing market and Canada’s strong economy and dearth of high-risk mortgage lending should help the real estate sector withstand the volatility that has been buffering the equity markets.   Ultimately, the Canadian market should be relatively unscathed by the turbulence experienced in the US*.

The need for safer investments and more secure enterprises by the investors has triggered the creation of alternate funds and investment opportunities; the MBN Bond Fund being a prime example.

The MBN Domestic Bond Fund 7-1 is an RRSP eligible fund and it provides consumers with a 7% annual rate of return on their investment, without deductions, compounding over a 4 year term, and provides annual internal and dividend returns paid to each Bond Fund Shareholder. MBN Finance Ltd., a division of MBN Ltd. administers all of the capital within the fund to finance Building and Land Development Projects. In addition, these funds are used to provide Bridge and Interim Financing through MBN Mortgage, and to contribute to viable real estate projects across North America, with its primary focus in the stable Alberta market.

Due to the US housing crisis and inevitable fallout from this crisis, Canadian consumers are seeking local investments opportunities in the Canadian Market and are turning to safer, secured investments, such as the MBN 7-1 Bond Fund, which is managed by the Professional Services of Collins Barrow, Canada’s largest association of Chartered Accountancy Firms, and Scott Hall LLP – a full service law firm established since 1986 and is required to report to its qualified Board of Directors. This accurate management is paramount in the success of a fund such as this provides the safety that Canadian Investors are currently lacking in their US and Foreign Investments.

The near bankruptcy and ultimate merger between the Bank of America and Merrill Lynch and the bailout of AIG by the US Federal Reserve, further solidifies the need for strong Canadian Investments and the importance of domestic securities and funds. Consumers are feeling the fallout of their foreign and US investments and in turn, are searching for local investment opportunities. These local and secure investments are what continue to support the Canadian economy, increase its growth and strengthen the local market.

For information on a strong Canadian Investment that is Hard Asset Backed, contact your MBN Bond Fund Specialists at 1-866-955-9662 and they can teach you more about the Fund that provides a fixed 7.0% rate of of return, compounded annually over a 4 year term.

For additional information on your Calgary and Southern Alberta Mortgage Market Forecast, contact your MBN Mortgage Specialist at www.mbnmortgage.com or by calling 1-866-955-9662. 

MBN Mortgage

Globe and Mail*

September 18, 2008