Q&A With Gordon Pape: Investing in the Short Term


To navigate market uncertainties, you may want to consider a short term investment of one year. Photo: baona/GettyImages

Gordon Pape advises a reader looking to navigate market uncertainties with a short term investment of one year.

Q – Due to market uncertainties, what is the best route for a short term e.g., one-year investments? Thank you. – Mary D.

A – I think low-risk stocks like the major banks are the best choice, but it sounds like you want nothing to do with the stock market. That implies a fixed-income investment but with interest rates so low, don’t expect much of a return.

The best one-year GIC rate according to Ratehub.ca is 1.55 per cent from Saven Financial, a division of FirstOntario Credit Union (www.savenfinancial.ca). That’s well below the current rate of inflation so you’d actually be locking in a loss in purchasing power.

I suggest you’d be better off buying shares of Royal Bank, which pay a dividend of 3.4 per cent and offer growth potential. A bank ETF is another option. But it’s your decision. – G.P.

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