GIC - swanfinancial

For years and years people saved their money in GIC's.
Then they read about the fortunes to be made in the stock market.
But after all that's gone wrong the last few years, what should I do?

Some people are born GIC owners. Don't get me wrong. GIC owners are nice people. My mother couldn't bear the thought that her money might decrease in value except through spending. I wouldn't get any sleep from her phoning me in the middle of the night because she woke up worried about her money slowly disappearing as she snoozed.

The fact is everyone has a right to be comfortable with their investments. Some of us are willing to take a great deal of risk, some are willing to take some risk, and some just don't feel right unless their investment risk is minimal.

A guaranteed investment really isn't absolutely guaranteed, but it's as close to it as we can get.
I suppose if we use the investment rear-view mirror, we could say you SHOULD have been invested in GIC's the last couple of years. Even though interest rates are low, the lowest they have been in decades (excluding your credit card rates, of course), the small return has at least been a positive number.
As a general rule, you would use a GIC if there is a short period of time between the investment date and the date you expect to need the money. In this case a short period of time is less than 8 years. If it's a short term investment, then you probably should use a GIC.

Sometimes we have money we are willing to take some risk with. If what you have is 'no risk' money, then take no risk with it. Put it in a GIC.
If what you have is really someone else's money, such as trust funds, then be trustworthy and put it in a GIC.

The key issue to a question which only has a right and wrong answer years after the fact, is whether you are comfortable with the amount of risk you are taking. Maybe the answer is to control the amount of risk you are taking. You can do this by deciding where on the risk line you want to be. How much of your money will be in no risk GIC's and how much will be invested where there is a lot of risk?

GIC

Stock Market

In addition to how much money to risk, you can also decide whether your 'risky' investment has any features which minimize the risk. Perhaps it has a minimum value guarantee such as a Segregated Fund, or the fund invests in less risky stocks, is a bond fund, or is diversified to reduce risk.
Or perhaps, when all is said and done, there is just too much work to all these decisions and you just can't be bothered. You just want to know the money is safe and there will be more of it next year when you get your annual statement. If this is how you feel, then my advice is: Get a GIC.

Want to check out current GIC rates? Go to our GIC link page.

Want to test your risk tolerance? Send me a request.

Your Best Insurance Is An Insurance Broker