Q&A: Where to invest?

Question: Which is wiser: to invest my TFSA in the stock market or in GICs, since I’m close to 65 years old. – George N.

Gordon Pape answers: Neither is “wiser” — it depends on what you want to achieve with your Tax-Free Savings Account and your degree of risk tolerance. If you are using the account as a source of emergency funds, short-term GICs might be the best bet. However, the returns will be negligible because of current low interest rates so the amount of tax you actually save will be only a few dollars.

If you want to use the TFSA to try to maximize tax-free investment earnings, then the stock market is one option. Aggressive equity mutual funds or ETFs are also possibilities. In the end, it’s your call.