GICs – The Good, The Bad and The Ugly

Most Canadians are familiar with the term GIC – Guaranteed Investment Certificate.  For those that are not, a GIC is a type of fixed-income investment provided by financial institutions.  Typically offered in specific terms (1 – 5 years), a GIC guarantees interest payable and the return of principle at the end of the term. 

The Good - In times of market uncertainty and volatility, GIC owners can rest assured that the principle of their investment is protected.  There is no concern that their initial investment amount will decrease in amount.

The Bad - Depending on the health of the economy, the interest rate environment may not be very attractive.  If interest rates are low, then your investment will not earn a high rate of return.

The Ugly - The Consumer Price Index measures changes in the price level of a market basket of consumer goods and services purchased by households.  This index is widely accepted as the measurement of inflation for Canada. 

Why is this important?  Simply put, due to inflation, the value of $1 today, will be less or will purchase less goods and services, in the future.

The average inflation rate over the last 10 years has been 1.60%.  The average 1 year GIC rate over the same period has been 1.37%.  By investing your money into a 1 year GIC, you are actually losing value, relative to inflation, over time.  Your ability to purchase the same amount of goods and services in the future is lost because your money has not increased at the same rate as prices.  The average 5 year GIC rate over the same period has been 2.22%.  That said, you are locking your money away for 5 years leaving yourself with limited liquidity and flexibility.

Over the short-term, a guaranteed loss of future purchasing power is not a compelling reason to invest in a GIC.

Speak with your advisor to discuss investment options that provide the opportunity to outperform inflation.

Carlo Cansino, FMA, FCSI, CFP
905 771 5200 ext.238
Senior Financial Planning Advisor
Assante Capital Management Ltd.

Insurance

Travel Insurance

Many of our clients enjoy travelling.  Whether it be going to your condo in Florida, an exotic photography trip to Africa or travelling across the country to ski in BC, you need to have travel Insurance. 

But which plan is best?  Are you covered by your credit card?  Or your group coverage at work?

Let's start with group insurance and credit card companies.  It all comes down to understanding what's covered and asking the right questions such as:

What's the maximum trip length covered?  Many of these plans have a max. of 15 days per trip.

What's the max age covered?  Most of these plans cover you only to age 65.
Is your family covered under that plan?

Alternatively, you can buy your own travel insurance, but this too is complex since there are so many companies and options.  Well, after researching the market and examining the differences in products, we are now recommending a new travel Insurance provider – TuGo.  For over 50 years, TuGo (formerly Travel Underwriters) has been one of Canada's top travel insurance providers. 
 
Finally, for those who plan to travel well into their retirement, there is another option;  permanent travel insurance.  Manulife has introduced an option to buy travel insurance that automatically covers you until age 80 with no annual medicals and no increase in premiums.  You do have to apply for this plan under the age of 66.

One last reminder, medical travel insurance premiums do qualify as eligible medical expenses when filing your tax returns. Want to know more?

Call me today to discuss your travel insurance options.

Jorge Ramos, CFP, CLU, CHS
905-771-5200 ext. 235
Senior Estate Planning Consultant
Assante Estate and Insurance Services Inc.

ActiFi Third Party Survey

Client Survey Results - 100% Satisfaction with Advisors

In September of 2015, The McClelland Financial Group of Assante Capital Managment Ltd. sent out a third-party survey to our clients and asked them to rate us on many different levels - see survey here.

Client feedback helps us have a deeper understanding of our clients and improves client relationships. This information helps shape the service that we offer and, where there is an interest or need, to provide our clients with more information on our products and services. Ensuring that we are providing the highest level of service to our clients is a top priority.

Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and is registered with the Investment Industry Regulatory Organization of Canada. This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd.

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