Help a novice investor

[ArcticKnight]

I have money on the sidelines and would like to invest it a fixed or guaranteed rate interest bearing instrument (or something similar). I'm in Canada, so keep that in mind.


What type of instrument should I be looking for, and what kind of rate of return can I expect from said instrument.

PS. I don't need to get at the funds, if that matters.

Any suggestions would be helpful. I took a fair amount of money out of the market a few months ago, and it's earning nothing really in my investorline account, so I need to do something with it, and I'm too dumb/lazy to do any TA or serious research, and the marlet is iffy right now, so I'm thinking parking some money in something fixed might be good.

I'd even consider another mutual fund, but stuff like T-bill and money market funds seem bad to me right now. I already have enough in agressive funds.

Thanks for any help.

[Grizwold]

Hi ArcticKnight,

You want to make a safe, stable investment, without having to actively manage your investment. I'm not in Canada, nor have I ever made investments through a Canadian institution, but I can give you some simple advice.

You don't want to completely waste the potential of your cash (by leaving it in a checking account or something), but you're skeptical about the current market conditions. In such a case, I would recommend putting your capital in a high yielding savings account or purchasing some relatively short term CDs (in Canada, I think they are called GIC?). Hopefully you can expect 4-5%, but I'm not sure about Canada. Since you don't need the money soon, you may prefer a GIC, although in a few months, the market conditions might seem different. In America, a great site to check all sorts of rates offered by banks (such as mortgages, CDs, checking and saving accounts, etc...) is BankRate.com. I believe this site is from the same provider, and focuses on various bank rates in Canada. I suggest savings account as an alternative to GIC, because in a few months, you may feel that you want to invest that money elsewhere. If you had a lot of money and were willing to take on a little more risk, government bonds, or investment grade bonds may be suitable. Although that will take a little more effort than letting your cash sit in a savings account.

Clark

[ArcticKnight]

[ QUOTE ]
Hi ArcticKnight,

You want to make a safe, stable investment, without having to actively manage your investment. I'm not in Canada, nor have I ever made investments through a Canadian institution, but I can give you some simple advice.

You don't want to completely waste the potential of your cash (by leaving it in a checking account or something), but you're skeptical about the current market conditions. In such a case, I would recommend putting your capital in a high yielding savings account or purchasing some relatively short term CDs (in Canada, I think they are called GIC?). Hopefully you can expect 4-5%, but I'm not sure about Canada. Since you don't need the money soon, you may prefer a GIC, although in a few months, the market conditions might seem different. In America, a great site to check all sorts of rates offered by banks (such as mortgages, CDs, checking and saving accounts, etc...) is BankRate.com. I believe this site is from the same provider, and focuses on various bank rates in Canada. I suggest savings account as an alternative to GIC, because in a few months, you may feel that you want to invest that money elsewhere. If you had a lot of money and were willing to take on a little more risk, government bonds, or investment grade bonds may be suitable. Although that will take a little more effort than letting your cash sit in a savings account.

Clark

[/ QUOTE ]

Thx very much.

[Stake Monster]

ING Direct has some pretty good GIC rates for all timespans. I think they range between 4.15% and 4.65%. There's also T-bills , goverment bonds (~2.65% rate) and corporate bonds (higher yield but riskier).

Also there's ING Direct savings account which give you good interest as well, and you can always deposit money in there and keep it in GICs while waiting to know what you want to do with your money. That's what I am doing.