Young guy investing. GIC Plus? Thoughts?

[nobb]

So Im still a young guy, got a bit of money and thought I would get started investing in something. I just had a chunk of money matured from a traditional fixed GIC, but I dont really want to go for that again due to current low rates. I talked to a financial advisor recently and he mentioned something called a GIC Plus, which Ive never heard of before:

http://www.tdcanadatrust.com/GICs/MktGrowth.jsp

Just wondering if anyone has any experiences with GIC Plus and could offer their opinions and whether it is recommended? The market seems to be picking up right now, so I figure it may be a good safe investment since the worse that could happen is that you get your original principal back. But the shortest period is still 3 years, so it's hard to predict. Any tips on how to start researching which particular GIC Plus to go for?

Other investment tips would be great too. Just opened a TD Waterhouse account and have been attempting to follow the "Official Short Term Investments Thread" but that's a different story.

[JordanAndrew]

Why don't you try out a TFSA and max your contribution per year. You can also start contributing into RSP and get the tax refund in your next tax refund.

[nobb]

Ive already maxed out a TSFA with another fixed GIC. Hoping to play around with shorter term stuff for now (1-5yrs).

[.jl-]

TFSA :thumbsup: GIC :thumbsdow

[Meback]

I hate GIC's. Your money becomes trapped, and you get a bull shiet return. You would make more money picking up pop cans that you may happen to come across.

TD waterhouse is expensive commission wise. I can't really speak for you as I don't know how much you want to invest, what type of stocks you will be holdin, and how often you will be executing trades.

I use questrade and play only ETF'S. If you have been following the "short term investment thread" you may have already realized that almost each and everyone of us has a love and hate relationship with Horizon Beta Pros.

The best advice I can give is too keep your emotions in check and don't let it affect your judgement. Things will not always go your way, but money can be made with a little self dicipline.

[BigMass]

http://graphics8.nytimes.com/images/2006/05/07/business/gold.span.jpg

[Sugarphreak]

....

[nobb]

Well since the GIC Plus follows the market, wouldnt it possibly be better to just go for a mutual fund and constantly monitor it?

Questrade looks interesting, Ill check it out.

Also, would anyone know of a good resource to learn a thing or two about trading stocks? Ideally a free class or something. Ive been attempting to follow the Investing Thread on Beyond but I dont quite understand what's going on sometimes (especially SilverRex's posts lol).

[davidI]

^ It takes a lot to learn about stock investing. Investopedia.com is a good source. Stockcharts.com for technical trading. Stay away from the Stock Forums as everyone there is promoting their crazy penny stocks and suckering newbies into pumping up the price.

Sticking to the big blue chip companies or index ETFs (XIU) is a safe play while getting your feet wet.

I've been reading and actively trading for 5 years and still don't feel like I fully understand the markets. Hell, I even studied the Level 1 CFA materials to try and get a better handle on everything!

[max_boost]

There's so much involved it's hard to explain everything in one post and I'm probably the worst person to attempt it. There has to be a basic noob how to guide on the stock market.

Have you taken a risk analysis test yet? To see how comfortable you with certain investments. At first I was very low risk until I learned how things worked, then went super high risk, lost a shit load and now I'm somewhere in the middle of the pack. LOL!

Short term investments thread suggestions aren't for you, well not yet at least.

[thrasher22]

If you're going to invest, open a TFSA with an online brokerage like Questrade. You can put up to 10g's in, and you have potential to earn a lot more than the BS 1-2% that banks offer on TFSA's.

I have my tfsa's almost solely on XIU, which is a super low cost fund. Of course this means you don't have the security of a GIC (as I found out the last few days...)

[sputnik]

IMO GICs are for old people that are on a fixed income or for people that want to diversify a bit.

If you are young and looking for some long term holds put your money in a precious metals or energy mutual fund.

Find something from a larger firm (or bank) with low MERs and let it sit there.

They have been the stars of my portfolio over the last 10 years.

[Bondar]

Original Post Removed. (Please read the Forum Rules and Terms of Use (http://forums.beyond.ca/articles.php?action=data&item=1) before posting again, or risk getting banned).

[jonnycat]

Originally posted by Bondar
This financial widget really highlights the benefits of a TFSA. It is really a great opportunity to earn tax free income.

http://mthirty.com/mtrack/r/cibcswitch

http://blog.infinitemonkeysblog.com/files/images/obvious_troll.preview.jpg

[jonnycat]

Here comes the banstick!

[Xtrema]

Originally posted by sputnik
IMO GICs are for old people that are on a fixed income or for people that want to diversify a bit.

If you are young and looking for some long term holds put your money in a precious metals or energy mutual fund.


This.

But I have always been conservative so 20% of my investment always in some form of GIC. I also locked in some good rates before the market crashed in 2008.

IMO, GIC is for old people and people who cannot/should not be exposed to risk. Rate is so low right now that it's probably not worth it to buy any form of GIC, especially if you are young.

[nobb]

Wow old thread. But yea Im only locking in a bit of my savings into GIC...hopefully the rate will be better soon. Still looking for other ideas on what to do with my money, as I dont have any major plans for it for the next year.

Been making decent gains in stocks but god damn HNU crash a few weeks ago knocked me back down to a net loss =(

[Xtrema]

Originally posted by nobb
Been making decent gains in stocks but god damn HNU crash a few weeks ago knocked me back down to a net loss =(

IMO, if you stretch out long enough time, GIC at 5 to 6% annually compounded actually pwns the stock market*. Stocks and mutual funds are all about knowing when to get out. Leaving it in too long actually result in net loss.

* my observation being thru .com bust and recession of the past 2 years.

[themack89]

Originally posted by Xtrema


IMO, if you stretch out long enough time, GIC at 5 to 6% annually compounded actually pwns the stock market*. Stocks and mutual funds are all about knowing when to get out. Leaving it in too long actually result in net loss.

* my observation being thru .com bust and recession of the past 2 years.

You've obviously never heard of selling option premium.



But aside from that, stock market is truly simpler than everyone thinks.

Buy. Low. Sell. High. Do not buy the middle, do not sell the middle. And above all: patience, the markets will come to you if you can wait.

I've been a pirate at it for 6 years, have lost lots before I made lots. I noticed was things you learn will get more and more complex and then they will get simpler and simpler until you look back at yourself and just laugh out loud.

[Feruk]

GIC's are for old or risk averse people. Basically, you should only have them if you can't physically afford to lose your investment. Also, I can see SOME merit to middle aged people having a small amount of savings in GICs for risk aversion, but not a young guy under 30. Stay far far away.

ETF's are a good and relatively safe investment with far higher yeilds. Personally, I trade oil companies, fast food, clothing, and have ETFs for the balance. Figure out what you're interested in, learn about those companies, and trade in markets you know. Read a couple books on trading before you jump into anything.


Originally posted by Xtrema


IMO, if you stretch out long enough time, GIC at 5 to 6% annually compounded actually pwns the stock market*. Stocks and mutual funds are all about knowing when to get out. Leaving it in too long actually result in net loss.

* my observation being thru .com bust and recession of the past 2 years.

What?? Is this a serious post? Did you actually just indicate a 5-6% GIC is better long term then the average stock market return (which is around 12%). Sure it was true if you dived all the way down and then back up, but you can't use a 2 year sample size during just a RECESSION to predict future events... By that logic, this year the stock market will go up less then 6% year over year. I don't think so.

If an investor knew what they were doing, they could've easily had a 40%+ return year over year investing in blue chip stocks which devestates any 5% GIC return.

[dezmarez]

Originally posted by nobb
Wow old thread. But yea Im only locking in a bit of my savings into GIC...hopefully the rate will be better soon. Still looking for other ideas on what to do with my money, as I dont have any major plans for it for the next year.

Been making decent gains in stocks but god damn HNU crash a few weeks ago knocked me back down to a net loss =(


If locking up your money is an issue. As long as the GIC is not in your RRSP, so TFSA would be fine as well. You can take out a secured line of credit against the GIC in case anything arises and you need to take it out.

You will still have to pay interest on what you use, but it is better to pay a small amount of interest, compared to cashing out your GIC half way through the term and losing what you could have gained. These are very good for Market Growth GIC's as there is usually a pretty big penalty to cash them out.

Secured line of credits are usually at Prime+1%.

[Redlyne_mr2]

Gic was the worst investment I've ever made. I wouldn't ever put my money there again.

[Xtrema]

Originally posted by Feruk
If an investor knew what they were doing, they could've easily had a 40%+ return year over year investing in blue chip stocks which devestates any 5% GIC return.

https://graphtdam.soc.tdbank.ca/TD_NAV_Graphing_Service/GraphVender/growth/20100811-204637034.jpg

TD Cdn Index fund performance over 10 years.

Annual return of 2.5%

My GIC rate @ 2001, 5.5% for 5 years. Then 4% for another 5.

What I'm saying is, if you are in stock/fund market, you or your fund manager need to get in/out at the right time to reap actual gains.

Leave it and forget it get you nothing.

[DRKM]

Originally posted by Feruk


ETF's are a good and relatively safe investment with far higher yeilds. Personally, I trade oil companies, fast food, clothing, and have ETFs for the balance. Figure out what you're interested in, learn about those companies, and trade in markets you know. Read a couple books on trading before you jump into anything.



What?? Is this a serious post? Did you actually just indicate a 5-6% GIC is better long term then the average stock market return (which is around 12%). Sure it was true if you dived all the way down and then back up, but you can't use a 2 year sample size during just a RECESSION to predict future events... By that logic, this year the stock market will go up less then 6% year over year. I don't think so.

If an investor knew what they were doing, they could've easily had a 40%+ return year over year investing in blue chip stocks which devestates any 5% GIC return.

12% average stock market return? When? Because the last 10 years has been a net lose.

Also the advice about the ETFs. Horrible horrible idea. ETFs are not ment for new investors. Go look at the annual returns of these ETFs you speak of and explain how both the bear and bull ETFs have both negative returns?

I love the 40% a year claim. Its soooo easy. hahahha.


To the new investor: Don't go throwing your money into ETFs. Go look through the short term investment thread and you will see many of us lose alot of money on playing with etfs. ie: Me, Maxboost, 911turbo, ect.

If you are looking to get into the market I recommend looking into companies that you are interested and make an honest investment.

[91_Integz]

Originally posted by DRKM


12% average stock market return? When? Because the last 10 years has been a net lose.

Also the advice about the ETFs. Horrible horrible idea. ETFs are not ment for new investors. Go look at the annual returns of these ETFs you speak of and explain how both the bear and bull ETFs have both negative returns?

I love the 40% a year claim. Its soooo easy. hahahha.


To the new investor: Don't go throwing your money into ETFs. Go look through the short term investment thread and you will see many of us lose alot of money on playing with etfs. ie: Me, Maxboost, 911turbo, ect.

If you are looking to get into the market I recommend looking into companies that you are interested and make an honest investment.

This is the worst advice in this entire thread. ETF's are the BEST investment for new investors who don't know much about the stock market. You don't "play" with ETF's. You buy them, and hold them LONG TERM. "ETF" and "Short Term Investment" shouldn't even be mentioned in the same sentence, because they are two completely contradicting terms.

For someone who is young, investing in GIC's is not sound financial advice, because those are the people who CAN, and SHOULD take on the risk associated with the fluctuations we see in equity prices on a day to day basis....the thing is, it doesn't matter what happens on a day to day basis, if you have a long term focus. That's the key.

[DRKM]

Originally posted by 91_Integz


This is the worst advice in this entire thread. ETF's are the BEST investment for new investors who don't know much about the stock market. You don't "play" with ETF's. You buy them, and hold them LONG TERM. "ETF" and "Short Term Investment" shouldn't even be mentioned in the same sentence, because they are two completely contradicting terms.



ETFs are the best investment for new investors? Long term? hahahaha. Dont make me laugh. Derivatives such as ETFs are risky assets that experiencing time decay over long term if there is any volatility in the market.

Please do your research before advising people to invest in ETFs.

If you are looking for leverage look into futures at least they do not decay/ERODE in price.

[91_Integz]

Originally posted by DRKM



ETFs are the best investment for new investors? Long term? hahahaha. Dont make me laugh. Derivatives such as ETFs are risky assets that experiencing time decay over long term if there is any volatility in the market.

Please do your research before advising people to invest in ETFs.

If you are looking for leverage look into futures at least they do not decay/ERODE in price.

I think we have misunderstood each other. Obviously I'm not talking about leveraged ETF's. I`m talking about ETF`s that track the major indices, like XIU, EFA etc.

[max_boost]

Ya man.

Not the Horizons 2X ones :rofl:

ETF's > mutual funds. Lower mer and liquidity. Sell whenever you want. No restrictions.

Xtrema said, timing is everything.

In the last 10 years the TSX index went from 7500 to 15000 to 7500 and now at 11,500.

So depending where you were in on the action, you either made something, nothing, lots, or even down. :rofl:

[Manhattan]

Bump on an old thread.

How's the OP doing on his investments?

GIC have a role in a diversified investment in terms of keeping an certain amount of guaranteed principle on hand in case the investor needs to withdraw on short notice. 5 or 6% compounded on a GIC is a very solid investment in the long term. I think the most important thing is how to diversify a number of safe to risky investments.

[Manhattan]

Regarding ETF's. Seems like there's different types of them out there. Is there a listing somewhere that explains them?

[Skyline_Addict]

If you really want to have a combination of success and acquiring investment knowledge, use your TFSA for self directed investing. GICs are a waste of time if you're really looking to maximize your savings. They're for older folks who have their retirement savings sitting in an account and just need it keep up with inflation and not have any risk of devaluation.

[nobb]

Originally posted by Manhattan
Bump on an old thread.

How's the OP doing on his investments?


In terms of my stocks which I just got started in, Im not doing so well actually. I have not lost a single penny investing in companies (gained quite a bit too), but my big loss was playing with HNU. I'm down a few thousand right now due to some really back luck after natural gas plummeted. Im not going to play this leveraged ETF game anymore and I have my money in various energy companies now. I make about $170/month in dividends, some of that through PMT of which I acquired when the price was low due to nat gas. I'm actively watching these stocks daily. PMT Im willing to hold on to during the winter when hopefully gas prices will recover. If prices dont recover enough, I might let it go next year due to the risk of dividends being cut but Im not sure.

Also, I follow the following blog which I think is really good for a newbie:

http://www.beatingtheindex.com/

I just always keep in mind that the money in my stock account is money I can afford to lose, so I would never put most of my savings in there. Losing it all might make me cry in bed every night, but it wont change my quality of living significantly. #$!@$@# HNU :banghead:

Lastly, I have a bunch of money locked up in a GIC. I also put $10k in BMO because they had a new promotion where if you open up a new savings account with them and put $10k in, then you'll get an extra $200 if you leave it in there for a year. This is on top of the interest that you would normally get from the savings account. I'll decide on what to do with this money later.

Still gotta find some safer investment options. I dont mind having to actively manage it.

[Euro_Trash]

^^ Don't expect gas prices to rebound too much this year

[89coupe]

Originally posted by nobb
So Im still a young guy, got a bit of money and thought I would get started investing in something. I just had a chunk of money matured from a traditional fixed GIC, but I dont really want to go for that again due to current low rates. I talked to a financial advisor recently and he mentioned something called a GIC Plus, which Ive never heard of before:

http://www.tdcanadatrust.com/GICs/MktGrowth.jsp

Just wondering if anyone has any experiences with GIC Plus and could offer their opinions and whether it is recommended? The market seems to be picking up right now, so I figure it may be a good safe investment since the worse that could happen is that you get your original principal back. But the shortest period is still 3 years, so it's hard to predict. Any tips on how to start researching which particular GIC Plus to go for?

Other investment tips would be great too. Just opened a TD Waterhouse account and have been attempting to follow the "Official Short Term Investments Thread" but that's a different story.

How much are you wanting to invest right away?

[Feruk]

Yarr, leveraged ETF's, scary stuff. Not sure why you're playing those when the ones that follow indicies or foreign markets are quite a bit safer.

As to DRKM's comment above (from back in August), I'm not saying you can make 40% a year, or that it's the easiest thing in the world. All I'm saying is there were lots of BIG companies that did just because of how far they dropped due to the recession!

[nobb]

Originally posted by 89coupe


How much are you wanting to invest right away?

Maybe around $50k (not including the stuff in my stock portfolio) in something safe. Will graduate in a year, and until then, I dont have any real plans for the money.

I dont think I am willing to take any more risks after getting owned badly by natural gas. I've learned the hard way, so it's probably better to get back to taking baby steps now :cry:

Also, Im starting to register for free seminars with TD Waterhouse. If you guys have recommended (free) classes and seminars/books to take that would be great.

[91_Integz]

Beyond is the worst place you can come to for financial advice! Everyone here talks about reducing risk, and safe investments, but then will invest all of their money in one stock based on a conversation in the Short Term Investments Thread. It's insane.

The question you need to ask yourself is, WHEN do you need this money? If it's in the near future, and you are concerned about preserving your principal, then sure, maybe a GIC might make sense. But if you are saving for retirement, then create a DIVERSIFIED portfolio using Index ETF's, and forget about it.

No one can beat the index long term, so why even try? Investing doesn't have to be hard, but its peoples lack of discipline by trying to stock pick and time the market that will destroy them in the end.

/end rant

[shynepho]

Btw does anyone know of any savings accounts that offer atleast 5% like the good old days?