I have $1000 that I want to put away for a short term investment, mostly I want it out of sight so I don't spend it, but at the same time I want to work for me. I want to be able to pull it out if I need it when I want, not be stuck waiting for a specific date.
I think a canadian savings bond fits the bill, but thought I'd ask if anyone has other good ideas.
mattress
Hit the casino, worked for majin.
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IF you don't want it locked in your interest rate will be even shittier than the current shitty rates. But you can get a redeemable gic thru your bank. Marginally better than a savings account and you can pull it when you want to.
Intererst rates are frimly in the tiolet right now but ING gives better rates than a real bank and it takes a day to get the money out so your money would be very safe …from you
What is your risk tolerance?
How long is "short term"? On $1000, at interest rates these days, it may not be worth the effort.
What is your risk tolerance?
risk tolerance as in am I willing to lose a bit? I don't know anything about investments. I'd prefer low risk.
risk tolerance as in am I willing to lose a bit? I don't know anything about investments. I'd prefer low risk.
You don't want to spend it, but are willing to risk it?
If it is savings vs "investment", put it in a redeemable GIC, money market fund or a savings account at ING.
Yeah, you want a saving account. Low risk (and reward) and relatively easy to take your money out. You do not want a Canada Savings bond.
What is your risk tolerance?
He'll have sex with strangers if he's drunk.
Oh you mean investment risk.
You're not gonna make more than a couple dollars in the short term anyway, so either hit the casino and probably lose it all, or start picking up change
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If you have access to a stock trading account, buy Royal Bank series AA preferred shares. At the moment, you can buy these shares for $20.40 each, so if you can up your savings to $1080 you can get an even 50 shares. These shares will pay a quarterly dividend of $0.278 per share ($1.112 per year) or 5.45% annually.
The series AA shares will be redeemed by the bank on May 24, 2011 for $26.00. That means they will buy those shares back at that price. So, for each share you buy on the market for $20.40, you will get back $26.00 plus $1.95 ($0.278 x 7 dividend periods from now till May 2011) for an income of ($27.95 - $20.40) = $7.55 per share.
With 1.75 years to redemption that works out to ($7.55/1.75)/$20.40 = 21.1% annualized return. Your $1080 will be worth $1457 (less trade fees).
It's about as guaranteed as any investment going, only the collapse of RBC would cause them to default on those redemptions. Beats the crap out of buying GICs that are paying an interest rate that is lower than the inflation rate (aka losing money safely).
Kn.
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When many people suffer from a delusion, it is called religion.
If you have access to a stock trading account, buy Royal Bank series AA preferred shares. At the moment, you can buy these shares for $20.40 each, so if you can up your savings to $1080 you can get an even 50 shares. These shares will pay a quarterly dividend of $0.278 per share ($1.112 per year) or 5.45% annually.
The series AA shares will be redeemed by the bank on May 24, 2011 for $26.00. That means they will buy those shares back at that price. So, for each share you buy on the market for $20.40, you will get back $26.00 plus $1.95 ($0.278 x 7 dividend periods from now till May 2011) for an income of ($27.95 - $20.40) = $7.55 per share.
With 1.75 years to redemption that works out to ($7.55/1.75)/$20.40 = 21.1% annualized return. Your $1080 will be worth $1457 (less trade fees).
It's about as guaranteed as any investment going, only the collapse of RBC would cause them to default on those redemptions. Beats the crap out of buying GICs that are paying an interest rate that is lower than the inflation rate (aka losing money safely).
Kn.
This sounds really interesting.
I did some reading and came across the original prospectus:
http://www.rbc.com/investorrelations/pdf/SeriesAA.pdf
The Series AA Preferred Shares will not be redeemable prior to May 24, 2011. Subject to the provisions of the Bank Act (see "Bank Act Restrictions" in the prospectus), the provisions described below under "Restrictions on Dividends and Retirement of Shares" and the consent of the Superintendent, on and after May 24, 2011 we may redeem all or, from time to time, any part of the outstanding Series AA Preferred Shares, at our option, by the payment of an amount in cash for each share redeemed of $26.00 if redeemed during the 12 months commencing May 24, 2011, $25.75 per share if redeemed during the 12 months commencing May 24, 2012, $25.50 per share if redeemed during the 12 months commencing May 24, 2013, $25.25 per share if redeemed during the 12 months commencing May 24, 2014, and $25.00 per share commencing May 24, 2015 and thereafter, in each case together with declared and unpaid dividends to the redemption ate.
I think your response above makes it look like it is a guaranteed redemption in 2011 at $26.00 a share when it is in fact only the first time they MAY redeem them, and in fact, may not do so for many years after the fact? If they redeem, the 21.21% makes sense, but if they wait till 2012, your annualized return drops to 15.04%, 2013 to 12.16%, and so on. It still beats the heck out of 1.5% in a GIC, I just want to make sure everybody is aware of the details.
-Mark
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