Ever wish you could capture stock market gains without the risk of losing your hard-earned money? It might sound too good to be true, but a class of investments known as Structured Products aims to do just that.
In this episode of Money Talks, Rita is joined by financial professional Jonathan Cartier to demystify the world of structured products for the everyday Canadian investor. We break down the complex jargon into simple, actionable insights, exploring how these financially engineered tools can offer principal protection, enhanced yield, and unique market exposure.
This is a must-listen for beginner investors looking for safer ways to enter the Canadian stock market and an essential study guide for anyone preparing for the Canadian Securities Course (CSC) exam.
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Episode Timeline & Key Topics:
(00:00) Welcome to Money Talks & How to Ace Your CSC Exam
(01:15) What Are Structured Products? The Simple Explanation
(02:05) The Key Advantages: Diversification, Access, and Principal Protection
(02:45) The Hidden Downsides: Complexity, Illiquidity, and High Fees
(03:30) Deep Dive: Principal-Protected Notes (PPNs) Explained
(04:22) The "Zero-Coupon Bond + Option" Structure: How PPNs Actually Work
(05:18) Why You Don't Get 100% of the Market Return: Participation Rates & Caps
(06:10) PPNs vs. Market-Linked GICs: The Critical Difference (CDIC Insurance)
(07:35) Understanding Split Shares: One Stock, Two Ways to Invest (Income vs. Growth)
(08:41) The Power of Leverage in Capital Shares (and the Big Risk)
(10:05) Asset-Backed Securities (ABS) & The Securitization Process
(11:10) Mortgage-Backed Securities (MBS) in Canada: The CMHC Guarantee
(12:04) Prepayment Risk: The #1 Risk for MBS Investors You Need to Understand
(13:00) The Single Most Important Question to Ask Before Buying a Structured Product
You can listen to this episode on :
Apple Podcasts Link: https://podcasts.apple.com/ca/podcast/money-talks-your-guide-to-the-canadian-securities/id1828548549
Spotify Link: https://open.spotify.com/show/2FkGdY1vJxjnUeUzXEpVDI?si=7c8ffe74842342ba
YouTube:
Link: https://youtu.be/FZm-2dKcmBU?si=9CORewOvs_FV_NGY
Keywords/Tags: Canadian investing, structured products, principal-protected notes, PPN, market-linked GIC, mortgage-backed securities, MBS, split shares, asset-backed securities, Canadian stock market, TSX, beginner investing, finance Canada, safe investments, high yield, financial literacy, Canadian Securities Course, CSC exam prep, wealth management.
