Disclosures

Risks Associated with Investing in Municipal and Fixed Income Debt Instruments

Debt instruments may have varying levels of sensitivity to changes in interest rates, credit risk and other factors.  Generally the value of debt instruments falls when interest rates rise.  Debt instruments with longer maturities may fluctuate more in response to interest rate changes than instruments with shorter maturities. Many types of debt instruments are subject to prepayment risks, which is the risk that the issuer of the security will repay principal prior to the maturity date.  Debt instruments allowing prepayment may offer less potential for gains during a period of declining interest rates.  In addition, changes in the credit quality of the issuer of a debt instrument can also affect the price of a debt instrument, as can an issuer’s default on its payment obligations. Such factors may cause the value of investment to decrease.

  • Call risk–If your bonds are called prior to maturity you may not be able reinvest at the same interest rate.
  • Interest rate risk–An increase in interest rates will cause bond prices to decrease and vice versa.
  • Credit Risk– Investment may become illiquid or decrease in value if guarantor of a debt security goes bankrupt or unable to make interest payments or repay principal, or if debt credit rating changes negatively affecting your capital invested and subsequently its applicable interest or yields.
  • Market risk–Other things being equal longer term bonds have higher yield than shorter term bonds, but they also fluctuate more widely in price as interest rates go up or down.
  • Legislative risk–The risk that a change in the Tax Code could affect the value of tax-exempt bonds.
  • Liquidity Risk–Liquidity risk is the risk that arises from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss

Disclosures

Below is a brief overview of common risks inherent to investing, not all of which will be applicable to your suitability profile and portfolio.  Please contact your advisor if in doubt or if additional information is or may appear necessary:

 Forward-Looking statements: These statements may be identified by words such as “expect,” “should,” “could,” “shall,” and similar expressions. We caution that such forward-looking statements are qualified by certain risks and uncertainties that could cause actual results and events to differ materially from what is contemplated by the forward-looking statements. We disclaim any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-Diversification Risk – Having a high percentage of assets in a limited number of securities will make investment fluctuate more than having them well diversified. Having said this, diversification is not a guarantee of improved investment performance.

Depositary Receipt Risk (American Depository Receipts, European Depository Receipts, Global Depository Receipts) – Receipts issued by banks or trust company that evidence ownership of underlying securities issued by a foreign corporation. Depositary Receipts will not necessarily be denominated in the same currency as their underlying securities.

US Government Securities Risk – A security backed by the US Treasury or the full faith and credit of the United States is guaranteed only as the timely payment of interest and principal when held to maturity.

The market prices for such securities are not guaranteed and will fluctuate.

Hedge Funds: Hedge funds are speculative investments and are not suitable for all investors, nor do they represent a complete investment program. Hedge funds are not subject to the same regulatory requirements as mutual funds. An investment in a hedge fund involves the risk inherent in an investment in securities, as well as specific risks associated with limited liquidity, the use of leverage, short sales, options, futures, derivative instruments,” junk” bonds and illiquid investments. There can be no assurances that a manager’s strategy.

Emerging Markets Risk – Risk of investing in emerging markets include political or social upheaval, nationalization of businesses, restriction on foreign ownership and prohibitions on the repatriation of assets.

There may also be risks from an economy’s dependence on revenues from particular commodities or industries. In addition, currency transfer restrictions, limited potential buyers for such instruments, delay and disruption in settlement procedures and illiquidity or low volumes of transactions may make exits difficult or impossible at times.

WE DO NOT OFFER OR SELL SECURITIES TO U.S. PERSONS UNLESS EITHER (A) THOSE SECURITIES ARE REGISTERED FOR SALE WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND WITH ALL APPROPRIATE U.S. STATE AUTHORITIES; OR (B) THE SECURITIES OR THE SPECIFIC TRANSACTION QUALIFY FOR AN EXEMPTION UNDER THE U.S. FEDERAL AND STATE SECURITIES LAWS NOR DO WE OFFER OR SELL SECURITIES TO U.S. PERSONS UNLESS (i) WE, OUR AFFILIATED COMPANY AND THE APPROPRIATE PERSONNEL ARE PROPERLY REGISTERED OR LICENSED TO CONDUCT BUSINESS; OR (ii) WE, OUR AFFILIATED COMPANY AND THE APPROPRIATE PERSONNEL QUALIFY FOR EXEMPTIONS UNDER APPLICABLE U.S. FEDERAL AND STATE LAWS.