Its a rather strange question to be sure, but after experiencing one of the worst economic downturns since the Great Depression, many investors are looking for safe investment products that are capable of producing predictable investment returns. For many, this means investing in guaranteed investment products, such as guaranteed interest Contracts issued by insurance companies (GICs) or Guarantees Investment Certificates issued by banks (bank GICs).
These guaranteed investment products that earns interest may not seem as appealing or exciting as investing in an emerging market mutual fund or commodity index the variable chili peppers of the investment world. In fact, to some people, they are uninteresting investments in the same way that broccoli can seem uninteresting when compared to the latest gourmet food trend. We all know that broccoli is very good for you, and it is highly recommended by nutritionists everywhere. But, given the choice between a side of boiled broccoli and a side of roasted garlic “smashed” potatoes, its not unusual to find the better-for-you option politely left behind.
Nevertheless, with many stock market indexes reporting negative returns, a little certainty can go a long way towards providing you with more confidence when saving for your retirement. And there is a lot more to todays insurance GICs than many people may realize, making them healthy additions to any well-balanced financial plan.
GICs A Healthy Addition to Every Financial Plan
Diversifying your investments among equities, fixed-income investments and cash has been the cornerstone of sound financial planning strategies for some time. And GICs can be a great fit for many investors looking to add more certainty to the fixed-income portion of their portfolio.
GICs do offer one very important advantage when compared to other fixed-income investments: they offer a guaranteed interest rate, no matter what the financial markets are doing. This can help to reduce overall investment risk within your portfolio while youre saving for your retirement years.