for investors who have for years been forced to put their money into the stock market to find any sort of meaningful yield, according to the head of one Bay Street investment firm.
TINA is an acronym in the finance world that stands for “there is no alternative,” and the premise behind it is that the only place to find significant investment returns was stocks when interest rates were ultra low.He gave the example of comparing Royal Bank of Canada’s four per cent dividend yield to the return of a GIC, while acknowledging that the different tax treatment of dividends and interest income could come into play.
Many GIC products with terms of at least one year now have return rates that exceed four per cent. They also offer more security than volatile stocks since money invested in GICs is guaranteed.
Until GIC rates get a lot closer to the CPI increase, investors will continue to ignore them.
What a goof! $13,000 invested in RY 22 years ago in a DRIP is worth $113,000 today. $13,000 invested in a GIC at 4% compounded annually would be worth $30,808 today. Maybe its just me but I'd rather have a $100k return than a $25k return.
Lol real life inflation is around 15% certainly above 10% what you gonna do with 4% on a GIC
With rapid interest rates rising, years, one year gic will be 7% and mortgage rates over 8%. Which means our home values will decline another 40%