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My advice • July 27, 2022

Our advice for investing with peace of mind during periods of uncertainty

Investing with confidence is still possible!

In the wake of the pandemic, new challenges await. Many of us are having to review our budgets and reconsider certain expenses. And the volatility of the stock market is also bringing its share of questions and doubts about the future.

In this context, it’s more important than ever to find out what all your investing options are in order to make the right decisions for your situation. “To invest with confidence in the current climate, you just have to seek out good advice and have a good advisor,” explains Diane Rodrigue, a retail services advisor with the Laurentian Bank.

Choose the right product based on your investor profile

Before investing, the first step is to find out your investor profile. It’s determined based on your goals, risk tolerance and investment horizon.

Whether your profile is cautious, balanced or focused on growth, there are a multitude of investing options. With the support of an advisor at your local branch, you can find the investment that’s right for you.

Investments linked to the market for potentially higher returns

Mutual funds should be considered if your goal is growing your investment in the medium or long term. With a longer investment horizon, you can tolerate more fluctuations in the financial markets. While your principal investment and returns aren’t guaranteed, you can benefit from potentially higher interest returns on your initial principal.

A market-linked GIC, such as the ActionGIC, is a compromise between the return potential and security. While the interest rate depends on changes in the market, the principal invest-ment is guaranteed.

Fixed-rate investments for maximum security

There are investment products that allow your principal to be completely protected from changes in the financial markets. The principal is guaranteed and the return is determined in advance. Such is the case with term deposits, among others.

These are redeemable at any time, but you should note that no interest will be paid in cases of redemption before 30 days. Among other advantages, term deposits provide you with access to your funds at all times in case of an emergency. The return is generally lower than with Guaranteed Investment Certificates (GICs).

GICs also guarantee your principal as well as the interest rate depending on the term selected. Your money is invested until the due date in complete security. Since GICs are not redeemable in advance of the due date, laddering is a strategy to consider if you want to have access to funds on a regular basis.

Laddering your investments for more flexibility

Laddering is a strategy that involves dividing your total investment into several separate investments with different due dates. This method provides a number of advantages, especially during periods of uncertainty.

In addition to providing you with access to funds on a regular basis, laddering your investments also allows you to reinvest your funds in order to take advantage of a better return, for example in instances where there is an increase in interest rates.

Attaining your goals with a GIC

A GIC can fulfill a few needs. Here are three situations in which a GIC would be an ideal investment.

Obtaining a yield from your investment in complete security

No matter what your investment horizon, investments that carry some risk aren’t suitable for everyone. If you have a cautious investing profile and want your money to be protected from any fluctuations in the market, GICs should be a major part of your investing portfolio. Your investments will yield more stable returns until the time arrives when you need them.

Achieving a plan for the future

Given their flexibility, which enables you to adapt your investment based on your needs, GICs are the ideal investment product to achieve a variety of future goals.

Whether it’s for travelling, renovations, buying an electric car, buying a house or even going back to school, a GIC will ensure you have the funds you need to achieve your goals, thanks to its greater stability.

Portfolio diversification

Diversity is an important part of any good investment portfolio. In the large majority of cases, and even for investment profiles focused on growth, including a certain percentage of fixed revenue investments is recommended. A GIC will perfectly complement any portfolio while adding an element of security.

Whether you have more questions or are ready to make an investment, our advisors are available. They have the knowledge to guide you in your investment choices and will be happy to help you breathe life into your big ideas!

Ready to take the next step?

Whether you have more questions or are ready to make an investment, our advisors are available. They have the knowledge to guide you in your investment choices and will be happy to help you breathe life into your big ideas!

To learn more about GICs and their terms and conditions, take a look at our page or speak with an advisor.

To learn more about mutual funds and their terms and conditions, take a look at our page.

To learn more about term deposits and their terms and conditions, take a look at our page.

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