The financial services industry compensation structure is built on two key objectives, sales commissions, and account management fees. The cost of fees reduces your amount of invested capital, which reduces returns. At the same time, the risk of investment losses are incurred by the client and not the financial services industry.
Another important consideration is understanding where your investment is positioned in the financial food chain. Funds in your FDIC insured checking or savings account at your local bank have the least risk, while holders of common stocks are at the end of the line in terms of financial protections. While stocks benefit if prices increase, they have little or no protection on the downside. Even shares in once venerable companies such as Kodak, TWA, Enron, & Bear Stearns are no assurance of security.
Bondholders followed by preferred stockholders are closer to the front of the line. Interest payments on bonds are legal obligations and are payable before taxes. At the same time, dividends on preferred stocks are after-tax payments and need not be made if the company is facing financial difficulties. As an investor, your goal is to be closer to the front of the line in terms of protections.
Stadia Capital is about reducing fees and providing our clients with investment opportunities positioned closest to the front of the line. Rather than hiding behind legal terms such as seek to or hope to, Stadia Capital provides investments that pay stipulated interest on investments positioned closest to the front of the line.
Key Features & Benefits
- Reducing investment expenses
- Positioning closer to the front of the line
- The pros and cons of Equity investments