GARLOY
FINANCIAL
SERVICES LIMITED
600 Bay Street, Suite 309 (corner of Bay & Dundas)
Toronto, Ontario, Canada M5G 1M6
tel. 416-977-3835; fax 416-977-3807
e-mail: click here website: www.garloy.com
GARLOY
FINANCIAL
|
|
We can help you decide on
the GIC Strategies
that are appropriate for
you
In our web page GIC Investments we emphasized the security, peace of mind and preservation of capital offered by investing in term deposits and Guaranteed Investment Certificates (GIC's).
In our web page GIC Management we told you that if you did not want to keep track of all your term deposits and GIC's, we could save you the time and trouble by managing them for you and providing you with periodic reports.
In this web page we discuss investment strategies to maximize your returns from term deposits and GIC's.
At the outset it should be stressed that the strategies you adopt must be tailored to your individual circumstances.
GIC interest can be paid monthly, semi-annually, yearly or at maturity. Generally, the less the payment frequency, the greater the interest rate. However, your own individual circumstances may require that interest be paid monthly rather than on a less frequent basis.
Laddering has been suggested as a foolproof strategy for maximizing your returns from GIC's. It involves dividing the amount of your GIC investments into five equal portions, and investing the portions for 1, 2, 3, 4 and 5 year terms, respectively, and on maturity re-investing for 5-year terms. The theory is that over time you will thereby maximize your rate of return because a 5-year term usually pays the highest interest; therefore by investing only one fifth of your portfolio each year you avoid having to renew your entire portofolio in a period of low interest rates.
Laddering, however, is not foolproof. Sometimes it is best to use your discretion instead of adhering to a hard and fast rule. For example, in a low-rate period it may be best to simply renew short term, especially if the rate of return for 5 years is not appreciably more than that for one year.
Good judgement, based on your individual circumstances, should always be exercised. Speak to us about deciding what investment strategies are appropriate for you.
600 Bay Street, Suite 309 (corner
of Bay & Dundas)
Toronto, Ontario, Canada M5G
1M6
tel. 416-977-3835; fax 416-977-3807
e-mail: click
here website: www.garloy.com
