GET CASH FROM YOUR STOCKS NOW
By Melvin J. Howard
Retain beneficial ownership of your stocks while tapping their value now especially in this market. You could do it in the same way you use a home to secure an equity loan, you can quickly use your portfolio to secure a loan except that in a stock loan default, you keep the proceeds. Nonrecourse a stock loan product should be professionally managed .90% of the market value of your securities in cash could be eligible. Not all firms that do this kind of program are the same you should try to look for one with no margin calls for any reason.. Terms should be from 2 - 20 years and no out-of-pocket fees.
Retain beneficial ownership of your stocks while tapping their value now especially in this market. You could do it in the same way you use a home to secure an equity loan, you can quickly use your portfolio to secure a loan except that in a stock loan default, you keep the proceeds. Nonrecourse a stock loan product should be professionally managed .90% of the market value of your securities in cash could be eligible. Not all firms that do this kind of program are the same you should try to look for one with no margin calls for any reason.. Terms should be from 2 - 20 years and no out-of-pocket fees.
Nonrecourse: That means you walk away from repayment, forfeiting only the (presumably devalued) stocks with no consequence to your credit.
No interest or principal due until loan maturity. Dividends should be credited against interest rate. This is ideal for foreign stocks; as well for corporate insiders with large positions needing “liquidity” through careful unwinding.
No interest or principal due until loan maturity. Dividends should be credited against interest rate. This is ideal for foreign stocks; as well for corporate insiders with large positions needing “liquidity” through careful unwinding.
This will allow you to pause or continue weekly drawdowns to time market for best price; price drop "trigger" protects price. You should negotiate fees that are reasonable and can be paid in shares of stock so that no cash out of pocket is required..Your stocks should be free trading on a major exchange in the U.S., Europe, or Asia. The stock should not be restricted. The stock should also be free and clear; if margined, is ok , but disclose it .You have should have at least US $100,000 in portfolio value, and no outstanding loans/liens against portfolio. This technique could have worked with a company like Enron.. Shareholders who took their stock into a Loan before the price fell would have received 90% of its value at its height. When the price started to fall, they would have never been asked by any broker or lender to cover the shortfall in the collateral. When the company’s stock was suspended and became worthless. You would notify the firm that they would exercise their loan’s “nonrecourse default” provision, forfeiting the worthless stock without any consequence to your credit.
The result: you keep the cash and you owe nothing. If you sell your stock outright you have to consider the implications a sale is typically a taxable event; a loan is a loan and therefore normally not. (Consult a tax professional for specifics.) If you are a stock insider or own a large position, outright sales on the open market can have devastating effect on stock price when it is perceived that a major shareholder is “bailing out”. Stock goes up, you aren’t there. But some or all of upside is yours with a loan , even as downside is limited to 10%. Selling your stocks can dilute ownership for large positions. you could stay in and out of the market, with 90% cash in your pocket..
The alternative is Equity Collars: Large up-front fees common; considered by most attorneys to be a margin loans; unpredictable, variable interest
rates. There are also Variable Prepaid Forwards (VPFs): Not a loan, but actually a sale; cash advance is usually well under 75%; considered a legal “grey area” with added risk due to lack of known share prices in advance. For flexibility, safety, and benefits this could be the right securities-based financing product when you are staying in and out of the market simultaneously with
90% cash in your pocket while still retaining your investment goals.
rates. There are also Variable Prepaid Forwards (VPFs): Not a loan, but actually a sale; cash advance is usually well under 75%; considered a legal “grey area” with added risk due to lack of known share prices in advance. For flexibility, safety, and benefits this could be the right securities-based financing product when you are staying in and out of the market simultaneously with
90% cash in your pocket while still retaining your investment goals.
