TFSA: HISA 5.95% or XUU.TO (S&P 500)?

[mpierce]

I took advantage of a Tangerine TFSA with a promotional interest rate of 5.95%.

With the US market setting a new record this week and history data that years were new market records are typicially double digit growth. Should I ride out the promotion or transfer to my Questrade account and just buy XUU.TO (S&P Index ETF) right now?

My original plan was after May (Tangerine rate goes to 0.70%) move to QT anyway, and put it into either CASH.TO or any typical 20% bond / 80% stock ETF.

QT will cover the transfer fee.

My plans was also to just dump the entire amount into one thing and that is firm. I have other monies in a diversity of ETFs.

This is what got me asking this question:

 

[johnnyhouse]

@mpierce Don't try and time the market. And if you do, "buy high" is the worst way of doing it.

If you need the money in the next 5-6 years, don't. If you can leave it there for the long term, do.

 

[dwrity90]

@mpierce Markets are supposed to always set records. It’s not like breaking a sports record or something. The numbers are supposed to always go up, even if it’s just inflation.

Them being at an all time high right now shouldn’t influence your investment decisions. If you need the money in the next few years and can’t afford to lose it then keep it in a HISA. If it’s longer term then history says you should invest in equities and that on the whole they’ll have a higher average return over the next decade.

 

[mpierce]

@dwrity90 So I plan on keeping it in a TFSA but my rate in the HISA June 1st goes from 5.95% to 0.70%. That is not enough value for me. I do want to be more on the aggressive side and I don't know how if an interest rate slash comes how that effects cash.to. Maybe I'll do the XEPT/XGRO

 

[kazoolo]

@mpierce XUU isn’t sp500. It’s like heterogenous twin brother of ITOT. It covers US total stock market and is traded in Canadian dollars.

PE (price to earnings) wise, xeqt/xgro is cheaper than XUU. Fundamentalists would recommend xeqt or xgro. If you believe stock market’s values are less dependent on fundamentals but more on how much money is inflow and outflow, XUU should be your pick.

 

[mpierce]

@kazoolo thanks for the clarity.

 

[emilswift]

@mpierce There's no situation where you should be debating between a HISA and a total US market ETF. These are investments intended for completely different purposes.

 

[mpierce]

@emilswift noted.