From Pokemon cards to music royalties: Do alternative investments work? + MORE Oct 22nd

When some rare first-edition Pokemon trading cards went on sale three years ago, Adam O’Brien was hit with a wave of nostalgia. For the now 32-year-old, it was an irresistible offer that had the potential for value in the long run.  

It was a bit of a gamble, spending $100,000 for three packs of cards. But it paid off: two of them combined were worth more than what he paid.

“One could argue the Pokemon cards and trading cards are a better place to store your value than something like the U.S. dollar, just given the scarce properties of the cards,” said the Edmonton resident in an interview.

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What are alternative investments?

Alternative investments—assets other than stocks and bonds—may bring to mind hedge funds or real estate…

“Bonds are back,” you may have read on a financial news site or heard a financial advisor say recently. True enough, money is flowing into these fixed-income investments at the highest rate in years, and for good reasons.

In fact, Canadian savers have an abundance of good choices right now for places to earn rates of interest that will keep their money growing ahead of inflation. So, where should you put your money: in bonds, guaranteed investment certificates (GICs) or a high-interest savings account (HISA)? You may be surprised at how similar these are for interest rates. But there’s more to the story.

Is it time for Canadians to invest in bonds again? 

The talk of bonds coming back only makes sense if you understand where they went. For most of the past decade, bonds have been a terrible investment as interest rates fell to historic lows, meaning they paid almost no interest. Then inflation took off as the global economy lurched out of the COVID-19 pandemic, and central banks were forced to raise interest rates—fast…

The Canadian mortgage stress test applies to anyone applying for a mortgage, refinancing their current home loan, or renegotiating the terms of their mortgage contract with a federally regulated lender. And while provincially regulated lenders have more flexibility when it comes to mortgage approvals, many still use the test to evaluate customers’ financial risk. This means that most home buyers in Canada are subjected to the stress test.

“It applies to everyone—you, me, first-time buyers and 10-time buyers,” says Maxine Crawford, a mortgage broker who serves the Greater Toronto Area (GTA) and elsewhere in Ontario. “That includes people who already own a home and need to refinance their mortgage.”

In spite of its broad application, many Canadians may not be aware of the stress test or don’t understand how it works. Here’s what you should know before you apply for your next home loan.

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