If you go to our website and search for “parking money”, you will see several posts on that subject. The primary objective of parked money is to have it available to buy the S&P 500 as represented by SPY when it drops. We have recommended buying TDB166 to park money. It is a money market fund, safe as any investment and instantly available when needed. The APY (annual percentage yield) of parked money has never been high.
Writing in the Globe and Mail on April 14, Rob Carrick has pointed out that guaranteed investment certificates (GICs) are now paying more than twice as much as any money market fund. The GIC equivalent in the US is the Certificate of Deposit (CD).
We have frequently stated that GIC stands for Guaranteed Instrument of Confiscation. Now paying the highest return in over two decades, it is still 1/2 of the rate of inflation so yes, money invested in a GIC loses purchasing power. That is the worthwhile cost of keeping our powder dry.
Americans can buy GICs from their bank even though GICs are Canadian securities.
Here is what I would do to take advantage of the current high GIC rates.YOU NEED TO LOGIN TO VIEW THE REST OF THE CONTENT OR LEAVE A COMMENT. Please Login. Not a Member? You can now sign up for $12 for a one-year membership. Join Us