Bear markets: What’s a long-term investor supposed to do right now? + MORE Jul 13th

How to go about securing the best Retirement Plan in Canada.
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U.S. withholding tax in an RRSP for Canadians + MORE Aug 3rd

I have EPD stock in my RRSP for their dividend payments (about 7%). What a surprise I had—even when in an RRSP—I had to pay about 30% tax on these dividends. EPD is registered in Louisiana. —Wanda How much is withholding tax on U.S. dividends? I am going to provide a brief summary of U..... More »

Why GICs might be a better investment than stocks and bonds Aug 17th

Financial markets have fallen quite dramatically in 2022, and that has made choosing investments even more difficult than usual. The turmoil has made many investors nervous about investing in stocks. The Toronto Stock Exchange (TSX) was down nearly 10% for the first half of 2022, and the S&P 500.... More »

5 reasons to buy life insurance—right now Aug 24th

If you’re working to improve your financial situation, a few strategies may come to mind: paying down debt, building an emergency fund, investing inside a tax-free savings account (TFSA) or a registered retirement savings plan (RRSP), or putting your money in other savings vehicles. These are all .... More »

What time of year should you retire? Sep 7th

Is there a better time of the year to retire based on tax implications: December 31 versus June 30 versus January 30? —Laf The best date to retire for tax purposes For most Canadians planning their retirement, tax isn’t the primary factor, Laf. However, there are instances when tax can com.... More »
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Making sense of the markets this week: August 28 + MORE Aug 31st

Kyle Prevost, editor of Million Dollar Journey and founder of the Canadian Financial Summit, shares financial headlines and offers context for Canadian investors. Banking on stability and caution Canadian investors love their banks. Year in and year out, banks provide dependable dividend growt.... More »
My husband is retired and concerned that his money that is invested in his RRSP and TFSA is fluctuating too much. He is retired and is wondering if his funds should be in a GIC account as it’s paying 4% and not losing principal. He’s concerned in this volatile market.—Rodeen

Are GICs a good idea for retirement?

As you noted, Rodeen, guaranteed investment certificate (GIC) rates have risen to levels we have not seen in over 10 years. There are one- to five-year rates that are between 4% and 5%. You may not get these rates at major banks, though, where rates are about 2% lower than that, but credit unions and trust companies generally offer a healthy premium.

Are GIC rates going up in Canada?

A year ago, GIC rates were less than 2%. The reason they are so much higher now is worth considering. The May year-over-year inflation rate was nearly 8% so the Bank of Canada (BoC) has raised interest rates to slow down spending and price increases. So, while a 4% GIC rate may seem enticing, it represents nearly a 4% negative real rate of return when adjusted for 8% inflation…

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My mutual funds are doing terribly, and I know they always say that it is better to stay the course and ride out this market crash and whatever. But I’ve been thinking about divorcing my big bank for awhile now. I have RRSP with mutual funds that have high management fees with RBC, slightly better ones in Tangerine, as well as robo-advisor RRSPs in WealthSimple. If my RRSPs are tanking in RBC now anyway, is this a good time or a terrible time to divorce them and move all of my money to a robo-advisor ETF or something somewhere else?

Otherwise, I am resigned to just leaving my money there. They’re taking less now anyhow, since I’ve lost like $9,000 already. I would be grateful for any advice or any resources you could recommend to make an informed decision. I’ve been enjoying your newsletters for a long time.

—Miki 

How to remain a long-term investor in a bear market  

Miki, after reading your question I am a little concerned for you.

The way you’re describing things it sounds like you’re getting poor or quick advice with very little explanation…

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