Comments on: What Is the Safest Investment? http://balancejunkie.com/what-is-the-safest-investment/ In search of a better balance in money ... and in life Fri, 18 May 2012 18:01:22 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: What You Need to Know about Online Investment Fraud | Balance Junkie http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-37775 What You Need to Know about Online Investment Fraud | Balance Junkie Mon, 12 Mar 2012 13:34:07 +0000 http://balancejunkie.com/?p=3474#comment-37775 [...] our own investing, I try to make sure we hold our cash in CDIC insured financial institutions and our investments at IIROC and CIPF members. In the [...] [...] our own investing, I try to make sure we hold our cash in CDIC insured financial institutions and our investments at IIROC and CIPF members. In the [...]

]]> By: Where Is the Stock Market Headed Next? Part II | Balance Junkie http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-2650 Where Is the Stock Market Headed Next? Part II | Balance Junkie Sat, 19 Jun 2010 13:32:51 +0000 http://balancejunkie.com/?p=3474#comment-2650 [...] is the safest investment. If you have a very long time horizon (more than 20 years), you could maintain a small equity [...] [...] 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 http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-2524 Are Money Market Funds a Good Place to Park Your Cash? | Balance Junkie Mon, 14 Jun 2010 13:23:50 +0000 http://balancejunkie.com/?p=3474#comment-2524 [...] 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 [...] [...] 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 http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-1850 How to Manage Your Money in Uncertain Times | Balance Junkie Sat, 22 May 2010 14:29:49 +0000 http://balancejunkie.com/?p=3474#comment-1850 [...] 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 [...] [...] 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 http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-1823 Modern Portfolio Theory: Fact or Fiction? | Balance Junkie Fri, 21 May 2010 09:55:38 +0000 http://balancejunkie.com/?p=3474#comment-1823 [...] 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 [...] [...] 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 http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-1231 GIC Primer: Frequently Asked Questions | Balance Junkie Wed, 14 Apr 2010 13:41:54 +0000 http://balancejunkie.com/?p=3474#comment-1231 [...] 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 [...] [...] 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 http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-1200 Laronda Fie Mon, 12 Apr 2010 16:13:16 +0000 http://balancejunkie.com/?p=3474#comment-1200 Excellent article as always, thank you for writing so much informative content on a regular basis. Excellent article as always, thank you for writing so much informative content on a regular basis.

]]> By: 2 Cents http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-1011 2 Cents Tue, 30 Mar 2010 11:55:16 +0000 http://balancejunkie.com/?p=3474#comment-1011 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)? 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 http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-1005 How to Ladder GICs | Balance Junkie Tue, 30 Mar 2010 09:54:23 +0000 http://balancejunkie.com/?p=3474#comment-1005 [...] 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 [...] [...] 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 http://balancejunkie.com/what-is-the-safest-investment/comment-page-1/#comment-1000 Andrew Hallam Tue, 30 Mar 2010 03:08:44 +0000 http://balancejunkie.com/?p=3474#comment-1000 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 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

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