10 y GIC at 5% or S&P 500 in your TFSA ?

[bluesky95]

What would you choose and why ? I have about 10k room available (remainder of TFSA is in equities) in my TFSA should I just buy GIC and call at day ?

Some context.

Bye-bye, bull markets: A top forecaster predicts the S&P 500 will return just 2% a year after inflation over the next decade.

https://finance.yahoo.com/news/bye-bye-bull-markets-top-181636560.html

Vanguard Predicts Stock Returns — You're Not Going To Like Them

The scariest prediction of them all? U.S. stocks, for instance, will rise just 4.7% to 6.7% annually over the next 10 years, Vanguard says. That's a fraction of the S&P 500's annualized 9.3% return going back to 1928.

https://www.investors.com/etfs-and-...s-stock-returns-youre-not-going-to-like-them/

 

[usaffire2724]

@bluesky95 Who's giving out 10 year GICs at 5%?

 

[changer29]

@bluesky95 Hmm, S&P 500 is up nearly 20% YTD, which beats the heck out of a GIC return. No guarantees every year is going to be like that, obviously ... but over the long haul, I would choose the stock market for the bulk of my investments every time.

There's a place for some low-risk stuff like GICs, but I wouldn't focus on that for a 10-year period (so consider how much of your total portfolio this $10K represents). For me, I keep almost all of my long-term investments in equities - only my short-term savings are in things like GICs. But everyone has their own risk tolerance, so this is a very individual decision!

 

[bluesky95]

@changer29 Best answer so far. Thank you.

 

[kowalski1]

@bluesky95

1. Nobody knows how much the market will return over the next decade.
2. Even assuming they do, 2% after inflation is not bad. Your 5% GIC might not beat that.

Really comes down to risk tolerance, like always.

 

[giddyg]

@bluesky95 S&P is up 14% this year isn't it?

 

[birdlegs]

@giddyg 19% YTD. Money market gang so far at 2.5% YTD

 

[wyatt1111]

@bluesky95 https://www.cnbc.com/2013/03/14/bear-market-to-take-hold-in-2013-expert.html

https://financialpost.com/business-...-why-stocks-could-enter-a-bear-market-in-2013

 

[beckylynn]

@bluesky95 Lol those context blurbs are hilarious.

I heard the opposite.

 

[bluesky95]

@beckylynn Please provide me with a link. Thanks.

 

[beckylynn]

@bluesky95 The source is myself.

It's all BS. No one has a crystal ball.

 

[bluesky95]

@beckylynn Where you heard it ? Please provide a link to back up your claim.

 

[wyatt1111]

@bluesky95 I heard it as well.

Source:

https://www.reddit.com/r/PersonalFinanceCanada/comments/153i8xw/_/jsjoutw