subject: Choosing A Safe Investment Option [print this page] If you want to include some safer investments as part of your complete wealth management strategy, then you will find that you have many options to choose from. After feeling the effects of the 2008 economic downturn, many Canadians have started to turn away from the markets and instead look for investment options that would give them a more modest return, but would also guarantee that they would never end up with less money than they started with.
If you're among those interested in this type of investment vehicle, then here is how you can get started:
- Look at your choices
If you want an investment that will not lose value, then you have a few choices available for you. The most common ones are high interest savings accounts, guaranteed investment certificates and federal government issued bonds. Each investment type has unique characteristics, such as the minimal amount of investment necessary and the amount of time that you need to hold the investment for.
- Get professional advice when necessary
The decision as to whether you get professional advice from a wealth management expert or dedicated financial advisor is up to you. However, if you're new to investing, you may benefit from some advice from an expert in the field of finance. Such advice can especially be beneficial to you if you have a large amount of money that you would like to invest. Your advisor can explain to you how the different investments work and recommend those that may be better suited for you.
- Consider the returns that you would get
On some investment types, such as GICs, your return would be a fixed amount. So if a 12 month GIC pays an interest rate of 3%, for example, you would get this amount on top of the principal that you've invested after one year. Other investment types could have rates that are variable, such as high interest savings accounts where the bank reserves the right to make changes to the interest rate. If you plan to reinvest the profits of your investment year after year, there are free calculator tools that you can find online which will help you determine how fast your money will grow.
- Keep looking out for new opportunities
New investment opportunities could emerge at any time. This is why it is recommended that you follow financial news updates, or occasionally meet up with an investment advisor to get some information on whether you may have new opportunities that you could take advantage of.
