Stocks And Bonds
Clearing Through Pershing
In order to provide our clients with top quality service and execution at a competitive price, Centaurus contracts with Pershing, a division of Donaldson, Lufkin & Jenrette Securities Corporation (DLJSC), which is the largest clearing firm in the world. Accounting for approximately 15% of the daily volume on the New York Stock Exchange, DLJSC is a leading investment banking firm with total capital of more than $1 billion and toal assets of approximately $40 billion. In addition to SIPC coverage of $500,000 ($100,000 for cash balances) Pershing provides excess coverage of $9.5 million for securities only, through a private insurer, thus providing total account protection of $10 million. Through Pershing, Centaurus offers the following services:
Many companies raise capital through the sale of corporate stock to the public. When the stock is first sold to the public, it is known as an IPO or Initial Public Offering. More frequently, "common stock" is bought and sold each day in "secondary markets" around the world, such as the New York Stock Exchange, the NASDAQ, or the many foreign exchanges.
Profitable companies often distribute a portion of their earnings to the shareholders in the form of dividends; the potential receipt of dividends is a common motivation for purchasing a particular stock. Perhaps more importantly, stock ownership permits investors the freedom to choose the companies they believe will be successful and to become an owner, to the extent of the shares they purchase, of those companies. Stock ownership can therefore be both exciting and liberating, but it should be pursued with caution, discipline and professional guidance10.
Bonds (Fixed Income Securities)
Fixed income securities provide a guarantee, backed by the issuing entity (usually a government, municipality, or corporation), to return your original investment principal plus a fixed interest rate if the bond or bill is held to maturity. There is usually a correlation between the creditworthiness of an issuing entity and the interest rate that is paid to the bondholder. The higher the credit rating of the issuing entity, the lower the risk of investment and hence the lower the interest rate. Bonds can also be traded through secondary markets allowing the investment to be sold at the market rate rather than held to maturity, thereby providing liquidity11. Fixed income securities provide:
Most municipalities raise money through the sale of bonds (i.e. they borrow from investors). Because there is a civic purpose for the money raised through these bond issues, they often receive special tax treatment from state and federal authorities. Tax-Exempt Municipal Bonds offer:
10, 11, and 12. Selling price may be more or less than the price one paid for the security.
Clearing Through Pershing
In order to provide our clients with top quality service and execution at a competitive price, Centaurus contracts with Pershing, a division of Donaldson, Lufkin & Jenrette Securities Corporation (DLJSC), which is the largest clearing firm in the world. Accounting for approximately 15% of the daily volume on the New York Stock Exchange, DLJSC is a leading investment banking firm with total capital of more than $1 billion and toal assets of approximately $40 billion. In addition to SIPC coverage of $500,000 ($100,000 for cash balances) Pershing provides excess coverage of $9.5 million for securities only, through a private insurer, thus providing total account protection of $10 million. Through Pershing, Centaurus offers the following services:
- • A consolidated asset management account combining brokerage services, free check writing, and a MasterCard Debit Card.
• Fee-based managed account programs offering access to some of the top institutional money managers in the country.
• Top quality investment research analysts providing action-oriented recommendations, analyses, and opinions on individual companies, industries, the economy, and financial markets.
• Timely execution of securities trades on stock exchanges across the country.
Many companies raise capital through the sale of corporate stock to the public. When the stock is first sold to the public, it is known as an IPO or Initial Public Offering. More frequently, "common stock" is bought and sold each day in "secondary markets" around the world, such as the New York Stock Exchange, the NASDAQ, or the many foreign exchanges.
Profitable companies often distribute a portion of their earnings to the shareholders in the form of dividends; the potential receipt of dividends is a common motivation for purchasing a particular stock. Perhaps more importantly, stock ownership permits investors the freedom to choose the companies they believe will be successful and to become an owner, to the extent of the shares they purchase, of those companies. Stock ownership can therefore be both exciting and liberating, but it should be pursued with caution, discipline and professional guidance10.
Bonds (Fixed Income Securities)
Fixed income securities provide a guarantee, backed by the issuing entity (usually a government, municipality, or corporation), to return your original investment principal plus a fixed interest rate if the bond or bill is held to maturity. There is usually a correlation between the creditworthiness of an issuing entity and the interest rate that is paid to the bondholder. The higher the credit rating of the issuing entity, the lower the risk of investment and hence the lower the interest rate. Bonds can also be traded through secondary markets allowing the investment to be sold at the market rate rather than held to maturity, thereby providing liquidity11. Fixed income securities provide:
- • A guarantee of principal and interest, backed by the issuing entity, if held to maturity.
• The flexibility of various maturities to fit your investment needs.
Most municipalities raise money through the sale of bonds (i.e. they borrow from investors). Because there is a civic purpose for the money raised through these bond issues, they often receive special tax treatment from state and federal authorities. Tax-Exempt Municipal Bonds offer:
- • An exemption from state and federal taxes allowing potentially higher after-tax earnings.
• Guaranteed returns, backed by the borrowing institution or municipality, if held to maturity.
• The opportunity to sell currently held bonds, before maturity, at the market rate in secondary markets12.
10, 11, and 12. Selling price may be more or less than the price one paid for the security.
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