These are complex structures. At a basic level, they allow investors to hold a variety of actively managed, high-growth investments within an insurance wrapper and avoid federal and state taxes on the policy's cash value.
The other issue is ensuring that the strategy will pay off. It only makes sense to buy such a policy if the cumulative cost of the annual premiums is meaningfully Of course, one of the reasons private REITs have lower compliance costs is also why some choose to steer clear of them. Another downside is that though investors get monthly or quarterly distributions, private REITs are illiquid, having lockup periods lasting from seven to 10 years. Finally, the annual fees usually run between 1% and 2%.
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Source: RollingStone - 🏆 483. / 51 Read more »