Comments on: What Is the Safest Investment?

By: Where Is the Stock Market Headed Next? Part II | Balance Junkie

Where Is the Stock Market Headed Next? Part II | Balance Junkie — Sat, 19 Jun 2010 13:32:51 +0000

[...] is the safest investment. If you have a very long time horizon (more than 20 years), you could maintain a small equity [...]

By: Are Money Market Funds a Good Place to Park Your Cash? | Balance Junkie

Are Money Market Funds a Good Place to Park Your Cash? | Balance Junkie — Mon, 14 Jun 2010 13:23:50 +0000

[...] investment vehicles out there. But, unlike savings accounts and GICs, they are not insured by the CDIC (or the FDIC in the States) and can technically result in capital losses. During the 2008 financial [...]

By: How to Manage Your Money in Uncertain Times | Balance Junkie

How to Manage Your Money in Uncertain Times | Balance Junkie — Sat, 22 May 2010 14:29:49 +0000

[...] the nasty stuff really hits the fan, I think both stocks and bonds could be dangerous places to be. The safest place is cash. If you’re worried, raise your cash allocation. *Please note that I’m not saying you [...]

By: Modern Portfolio Theory: Fact or Fiction? | Balance Junkie

Modern Portfolio Theory: Fact or Fiction? | Balance Junkie — Fri, 21 May 2010 09:55:38 +0000

[...] In today’s markets, increasing and shifting correlations between asset classes make cash the best diversifier. Stock and bond markets have, and will continue to be, volatile until we bring [...]

By: GIC Primer: Frequently Asked Questions | Balance Junkie

GIC Primer: Frequently Asked Questions | Balance Junkie — Wed, 14 Apr 2010 13:41:54 +0000

[...] Investment Certificates can offer investors a safe place to invest a portion of their capital. Depending on the length and features of the GIC you purchase, they can [...]

By: Laronda Fie

Laronda Fie — Mon, 12 Apr 2010 16:13:16 +0000

Excellent article as always, thank you for writing so much informative content on a regular basis.

By: 2 Cents

2 Cents — Tue, 30 Mar 2010 11:55:16 +0000

Thanks Andrew. You make a good point about inflation. The XRB (Real Return Bond ETF) is a good alternative for fighting inflation. With regard to the XSB, I understand your strategy, but you could also achieve something similar with a good GIC ladder and thereby avoid the capital loss in the bond fund as rates rise. Maybe a good balance would be a bit of all 3 (XRE, XSB, GICs)?

By: How to Ladder GICs | Balance Junkie

How to Ladder GICs | Balance Junkie — Tue, 30 Mar 2010 09:54:23 +0000

[...] recently wrote about how CDIC protection makes GICs one of the safest investments. Whether you decide to devote a substantial chunk of your portfolio to GICs, or just a small [...]

By: Andrew Hallam

Andrew Hallam — Tue, 30 Mar 2010 03:08:44 +0000

Well researched and written. And of course, you’re right in your assessment.

That said, there are other ways of looking at this. I prefer to go with a short term government bond index over anything fixed. Over time, if inflation starts running, my bond index will drop in price, increasing the yield, and when the index purchases new short term bonds in place of those that expire within the index, I’ll reap the higher interest yield on those–thus keeping pace with inflation.

Short term, your analysis is bang on. Longer term, you stand the risk of getting hit by runaway inflation. It happened in the 1980s, and it could happen again. That’s why I’d prefer a short term government bond index like XSB. I’ll always stay ahead of inflation. There are also inflation adjusted fixed indexed bond securities as well.

Cheers,
Andrew

By: Should You Invest in Stocks? | Balance Junkie

Should You Invest in Stocks? | Balance Junkie — Thu, 18 Mar 2010 09:58:40 +0000

[...] Stay out of the markets. You can keep your money in safe (but currently very low-yielding) CDIC insured instruments like savings accounts and [...]

By: Monday Link Love | Ultimate Money Blog- Save Green and Live Green!

Monday Link Love | Ultimate Money Blog- Save Green and Live Green! — Mon, 15 Mar 2010 23:23:20 +0000

[...] What is the Safest Investment? @ Balance Junkie [...]

By: 2 Cents

2 Cents — Sun, 14 Mar 2010 02:43:29 +0000

You’re right. Nobody’s going to retire quickly on GIC interest rates as they are now, especially if you’re relying on the big banks. To get a decent yield you need to look at the online institutions like ING, Canadian Tire, and Ally. But only ING deals with RRSPs.

Another alternative is to use a deposit broker like Fiscal Agents. Thanks for your input!

By: The Rat

The Rat — Sat, 13 Mar 2010 21:31:52 +0000

My asset allocation is presently at a roughly 50-50 split with safety and equities. My target allocation is to get to 60-70% safety over time.

In the interest of trying to answer this thread’s main question, I would say GICs are pretty damn safe because they are backed by the federal government and CDIC as opposed to other guaranteed vehicles. The only issue is that a lot of GIC rates from a lot of the leading banks aren’t offering the most lucrative interest rates in recent times.

Nice post!
.-= The Rat´s last blog ..Setting Up An Online Discount Brokerage Account & Investing On Your Own =-.

By: 2 Cents

2 Cents — Thu, 11 Mar 2010 16:07:37 +0000

I’m not sure if you’re talking about holding your own mortgage in your RRSP? Either way, I think your risk in holding debt on a house may be more than just a default issue. You may also have risk in the asset itself. If the house was destroyed by an uninsured incident or it’s value declined, that still affects your investment.

Having said that, this is not an area that I’ve explored very deeply, so if anyone else cares to add some insight here, that would be great. Thanks for raising the question Dave!

By: Dave

Dave — Thu, 11 Mar 2010 15:37:21 +0000

Can you not also say that Mortgages that are held in RRSPs are save if covered by CMHC Mortgage Loan Insurance?