First Trust Deeds vs The Dow: Who Has Bragging Rights?

Post Category : Lending


Whenever we flip over the calendar from December to January, the media is full of stories that look back at the previous year or longer. As I was scanning the financial news in the first few days of January, I noticed several stories ballyhooing how the Dow Jones Industrials were up an average of about 10 percent over the last five years.

That’s fine, but at Evoque Lending we do that well and better every day for our investors, and there are none of those nasty slides along the way. When an investor holds an index fund, for example, and needs to get out on a certain day, it doesn’t matter how well the fund did last year or will do next year – the only thing that counts is how the fund is doing today.

Individual stocks, mutual funds, ETFs and even commodities have their place in many investment portfolios – although a great number of people are staying away from these investments today for a variety of reasons – but including instruments like First Trust Deeds, whose return is defined, is almost always a very smart decision.

Predictability: Advantage First Trust Deeds

Five years ago, could any financial analyst have predicted 10 percent growth in the Dow? But if you hold a First Trust Deed you know exactly what interest it pays from month to month and year to year. Further, you can determine the term for any First Trust Deed you invest in at Evoque Lending.

Often, as individuals and families plan their financial future, they know that there will be certain future events that influence the strategy. For example, they may want to downsize or even upsize in a year or two. When those kinds of events are on the horizon, you can plan your investments in First Trust Deeds in ways that will make your cash available at the right moment in time.

Imagine having to sell stocks on a given date a year or two in the future. As good as the average appreciation in the Dow has been, there have been many days where it has dropped by several hundred points. When we talk about averages, all the ups and downs get smoothed out. Unfortunately, people don’t sell at “smoothed out” prices and sadly more people sell their stocks when prices drop than they do when prices are high. As many times as we’re told to “buy low and sell high,” most investors do the opposite.

That points to another good attribute of investing in First Trust Deeds: they bring discipline to investing. You’re able to logically decide what your goals are and match the terms of your First Trust Deeds to meet those goals.

The volatility of stocks can make them an “unsafe” investment for many and if you’re an investor, I’m sure you need to know what makes First Trust Deeds any safer, so let me quickly cover that subject.

There are two primary elements that ensure the safety of a First Trust Deed:

 The value of the property, and

 The ability of the borrower to make payments.

At Evoque Lending we meet these two requirements by working with the best appraisers, building some 40 percent of protective equity into every loan, and by carefully vetting our borrowers to make sure they have the means to make their monthly payment obligations.

We are specialists in Los Angeles real estate, Orange County real estate and real estate in the San Francisco area. The team at Evoque Lending understands the markets. We have been keeping investors happy and successfully meeting their goals for more than 15 years; we are experts at protecting their interests.

I’m sure many of you will have more questions and would like to know where to start. Please give me a call or send me an email so I can share more details with you.