Are GICs a Good Substitute for Bonds?

By 2 Cents on March 7th, 2011 | Category: Investing | 21 comments
GICs vs. Bonds

At high tide the fish eat ants; at low tide the ants eat fish.

~Thai Proverb

Stocks, bonds and cash are the three asset classes that most people consider to be the foundation of an investment portfolio, with stocks representing the most risky choice and cash, the least. Where do GICs fit into the mix? Some consider GICs (the Canadian version of U.S. CDs) to be part of your cash allocation. Others argue that many GICs don’t qualify as cash because you can’t always get instant access to your money. Some GICs are cashable, but you have to forfeit some or all of your interest earnings to get your money out.

In many ways, GICs are very similar to bonds. You invest your money for a fixed amount of time. You collect interest periodically throughout that period of time, and receive your [...]

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Are Money Market Funds a Good Place to Park Your Cash?

By 2 Cents on June 7th, 2010 | Category: Investing | 7 comments

In the old days a man who saved money was a miser; nowadays he’s a wonder.

~ Author Unknown

Update: This article is featured in the Carnival of Personal Finance #261 posted at Pop Economics. Thank you Pop!

Apparently the May stock market swoon spooked Canadian investors as they withdrew more than $1 billion from mutual funds in May. Investors seeking the safety of cash might normally move money from equity funds into money market funds. That’s not necessarily the case anymore, and for good reason.

If you have your money with an advisor who sells mutual funds, chances are moving your money into money market mutual funds is the fastest and easiest way to reduce your market exposure. But is it the best way? What are the alternatives?

Are Money Market Funds a [...]

Read on and enjoy … Are Money Market Funds a Good Place to Park Your Cash?

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