12d ago (edited) in General discussion
Looking to start a trading company. Which return do you prefer?
I’m looking to start a trading company soon that can potentially manage your capital and provide a decent return. I value the feedback in this community and wanted to know what works best for you.
Which option do you prefer the most? Please vote and let me know!
  1. 3-5 year Bond with a fixed 12% interest rate investing in the trading company. So you get 1% interest income monthly. If the company goes IPO one day, it can be converted into shares. The return for a bond is the most certain.
  2. Preference shares with a dividend between 12-24% investing in a fund. So you can get 1-2% per month depending on the fund performance. During down months, the return will be closer to 1% per month. The return will fluctuate between 1-2% per month.
  3. Managed account - No fixed return but volatile based on the strategy (and market). The fee for such managed account will be 2% per year + 20% of the profit (similar to a typical hedge fund).  The money will not leave your account but this will only be available to Canadian investors (for now). This is also the most volatile option. The goal is to aim for 30% return before fees (likely around 25% after fees). Possible to lose 20%.
For #1 and #2, there's no fee as the return is predetermined. For #3, the return can be volatile but the fee is predetermined based on the formula and percentage.
If you have any suggestions/alternatives, let me know as well
Cheers,
Eric
3-5 year bond with 12% interest rate (convertible)
Preference shares with 12-24% dividend
Managed account with no fixed return (Fee 2% + 20% profit)
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Eric Seto
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Looking to start a trading company. Which return do you prefer?
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