April 25, 2023
The stock market is declining and interest rates on GIC’s have jumped up.
What to do?
Do not lock yourself into a five year GIC at this time. They are not liquid.
Instead purchase a 1-3 year Investment Grade Corporate Bond. These bonds are liquid and can be sold anytime before maturity. Restrict your purchases to Canadian banks to minimize credit risk and make sure any one single issue and issuer do not represent more than 5% of your total fixed income exposure.
Do not purchase high yield bonds at this time, only investment grade.