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GIC Strategy (lemmy.ca)

submitted 2 months ago by [email protected] to c/[email protected]

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Hi all, I'm new to investing (just turned 18 this year).

I work a full time job and want to start saving and growing my money.

My current portfolio consists of a variety of sources, including GICs, managed ETFs, and cryptocurrency. For ETFs and crypto, I deposit a portion of my paycheque into the respective exchanges as part of a dollar cost averaging strategy. But for GICs, I'm a little confused.

I have one GIC already for a 13 month term, but I'm not sure of the optimal contribution strategy. Should I be buying a new GIC each month with a portion of my paycheque, or maybe accumulate funds annually and then put them into new GICs?

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[–] [email protected] 0 points 2 months ago (1 children)

I'm currently using Wealthsimple for 3.5% APY on my savings and my bank gives me 4.9% for GICs. I really just wanted a hedge against potential market disasters. Even though I have conservative and balanced ETFs, they could still collapse. Although, so would the Canadian dollar I suppose.

[–] [email protected] 1 points 2 months ago

Yeaaa if a true market disaster happens, GICs won't really save you. That's where gold may have a leg up, but at that point it's all chaos anyways.

It really comes down to what you are saving for. If it's something more than 5-10 years away, index funds will be the recommended path. Just make sure to include some bonds so you can sleep at night when it goes low.

If it's short term savings less than 5 years, GICs ain't bad! EQ bank has been my go to for that. Just try to get the best rate available for the time that works for you, don't sweat +-.5%

Highly recommend using the flowchart pinned to this community! Just follow those steps and you'll be golden.