Stock Markets vs. GICs


Here is your weekly update on what’s going on in the markets over the last week. As many of you know, the markets have experienced a considerable sell off as of late and can’t seem to gain any traction. Commodities have been hit the biggest.

The price of oil is down to 95.63 a barrel as of today down from a high of 114.18 in April of this year.

Gold is down to 1479 an ounce from a recent high of 1577.50 as recent as May 2.

The price of silver has been a wild ride as of late as well. Silver had gained 81% of a three month period and hitting a high of $49.51. But what goes up must come down. When the recent correction occurred, silver lost 11% overnight and has fallen to 33.51 as of today.

The Toronto Stock Exchange (TSX) which is Canada’s leading stock indicator had reached a recent high of 14314 as recent as of April 6th of this year and has since pulled back to 13398 as of today. This is roughly a drop of 7% over the course of 5 weeks.

On the GIC front, the top posted rates in our nation according to are as follows.

1year – 2.10%

3year – 3.00%

5year – 3.56%

The following are rates of return for the same time period for the average Canadian Equity investment fund based on

1year – 14.03%

3year – 0.87%

5year – 3.23%

10year – 6.0%

As you can see, none of these are that attractive. When you compare a 5 year GIC to a 5year investment in the stock Market it really makes you wonder why you would take the risk sometimes.

If you are looking for the security of a fixed rate investment with the growth potential of the stock markets (without the risk) please inquire about more information on the Jaymor Capital 10% Bond. Time is running out as June is fast approaching and this current bond offering will be closing.

I hope you have a great week and an even better May long weekend!