Q: I am a conservative investor. I am most comfortable with GICs. That said, everything I have read points to GIC rates continuing to go down. While I understand that investing in segregated funds can expose me to the market, I am not very comfortable with the volatility - especially in light of the many challenges the world is facing right now. Are there any other options? I could really use your help!
A: Being a conservative investor has its challenges. Taxes and inflation eat away at the modest returns available in the GIC market. They are safe but do they take advantage of even some of the many opportunities available? Sadly, the answer is no. Generally, if one invests in the market, there is a risk that you could lose some or even all of your principal. The future is unknown and the investment world can be a scary place. Keep reading there is a solution well worth your consideration.
Fortunately, you can have your cake and eat it too! For those who have safety as a primary goal, GICs absolutely protect your principal. They get taxed more, but you know the outcome.
A newer “hybrid” financial product is the Desjardins Guarantee Advantage Market-Linked Term Investments. They offer both a principal guarantee and returns that could out perform current GIC rates. They protect your assets from experiencing a loss while giving you an opportunity to earn more than the GIC rates available.
For a brief video overview, you may wish to look at:
https://www.youtube.com/watch?v=1LgUqs_lqxs
For information about Market-linked term investments, please visit the link below:
https://www.desjardinslifeinsurance.com/en/individual-savings/term-investments/market-linked
For details about the current campaign, please look at the below:
https://mwfs.ca/market-linked-gics
You may note that the deadline for deposits to this campaign is 17Jan2025. After this campaign ends, a new campaign will be rolled out. For centuries, prudent investment advice has suggested not putting all of your eggs in one basket. You may wish to consider GICs and GIAs for a portion of your total portfolio.
If you are comfortable with the notion of Market-linked term investments, you may wish to add them as a smaller percentage of your total portfolio. Then for longer term investing, you may also wish to add a third layer to your portfolio, segregated funds.
Based on your comfort level, you may choose 100%/0%/0% if you are really conservative. If you are somewhat conservative, perhaps your portfolio will look like 80%/20%/0%. If you are a little more moderate, perhaps your portfolio will look like 60%/30%/10% or even 50%/30%/20%. And if you are growth oriented, your portfolio could look like 30%/40%/30% or 20%/30%/50% or more!
What you choose is up to you. Please speak with your Account Manager to explore what options will work best for you!
