Best way to invest ~10000 in 1 to 2 year term?

[xtasyx]

I'm a student saving up for a car and i have about 2000 saved up so far. I work and make enough to have atleast an additional 10000 by the end of the year. What are some ways i can get them to add money monthly from my account to this investment plan/account and locked to a 1 or 2 year term as i won't need to take any of it out within the next 2 years. I was thinking of gic or some sort of mutual funds. Anyone done something like this and can shed some light? thanks!

[illusion81]

Get yourself one of those 4% PC Financial saving accounts and set it up so that it automatically moves x amount of $ every x amount of days from you chequing to your PC Financial savings account. You get interest equivelant to a 2 - 3 year GIC without having to lock your cash in long term. You never know, you might need that $ sooner then 2 years from now.

[zlinedesign]

I'd definitely put it in any of the Bank's Dividend Fund .... you're guaranteed to take in approximately 7-10%.

[cloud82]

Since it's only 1,2 years, I'd put it into GICs... (credit unions usually offer better rates... like outlook financial)

[15-20_God]

I'd definitely put it in any of the Bank's Dividend Fund .... you're guaranteed to take in approximately 7-10%.

only 3 things in life are guaranteed:

1) death
2) taxes
3) 7 - 10% return in a dividend fund.

[adamtheman]

If you're saving up to buy a car, you really shouldn't be worried about making wise investments, because any wise investments you make now will be trumped by the very stupid investment you make when you buy the car.

[notanexpert]

Ok, adamtheman, I see a problem here. Cars are NOT investments. Therefore the two should not be compared or even used in the same sentence. Many people in Canada NEED a car, and saving up and buying one is a need, not a want. Maximizing your return on the money in the meantime is a good thing.
15-20 god, I hope you're being sarcastic about the 7-10% guarantee on a dividend fund...
Two-year horizon is probably too short for any investment in equities (or equity mutual funds), unless you can postpone the car-buying if things don't go the way you were hoping.
Martin

[Acrossenger]

I'd definitely put it in any of the Bank's Dividend Fund .... you're guaranteed to take in approximately 7-10%.

How do I buy these fund? Do you have a link?

[Asun]

How do I buy these fund? Do you have a link?

15-20_God is being sarcastic.

[zlinedesign]

15-20_God is being sarcastic.

100% Agreed. Being too much of a smart alek. We all must be idiots. He is GOD! He knows everything in this world. He's the only educated one on RFD.

How do I buy these fund? Do you have a link?

Acrossenger:

all the banks have their own mutual funds. first you need to go into a branch to open a mutual fund account which involves a questionaire that assesses your knowledge and risk factors. (this is the Know Your Client form)

then the result of this series of questions ... the licensed mutual fund rep will recommend some mutual funds suitable for the profile.

dividend funds are not really volatile and risky. returns are moderate. all investments have a risk but generally dividend funds are quite stable.

past performance of most dividend funds range 7-10% returns over the past two years. granted .... not each dividend fund is the same.

check out the different banks ...

http://www.bmo.com/mutualfunds/index.html
http://www.scotiabank.com/cda/conten..._LIDen,00.html
http://www.rbcam.com/RBC:RgmPOI71A8Y...solutions.html
http://www.cibc.com/ca/mutual-funds/index.html
http://www.tdwaterhouse.ca/markets/mutual.jsp

[jda]

all the banks have their own mutual funds. first you need to go into a branch to open a mutual fund account which involves a questionaire that assesses your knowledge and risk factors. (this is the Know Your Client form)

then the result of this series of questions ... the licensed mutual fund rep will recommend some mutual funds suitable for the profile.

dividend funds are not really volatile and risky. returns are moderate. all investments have a risk but generally dividend funds are quite stable.

past performance of most dividend funds range 7-10% returns over the past two years. granted .... not each dividend fund is the same.

check out the different banks ...

http://www.bmo.com/mutualfunds/index.html
http://www.scotiabank.com/cda/conten..._LIDen,00.html
http://www.rbcam.com/RBC:RgmPOI71A8Y...solutions.html
http://www.cibc.com/ca/mutual-funds/index.html
http://www.tdwaterhouse.ca/markets/mutual.jsp

The only thing that "guaranteed" in Canada is that you'll get tax to death.
Dividend fund DOES NOT guarantee 7-9%/year within any given 2 year period. Past performance DOES NOT guarantee future result.

http://www.tdwaterhouse.ca/markets/mutual.jsp

Look at rbc's dividend fund if you bought in beginning of 2001 and sold at the end of 2002 you'll have a gain of 1.95%/year which is less than GIC.

[xtasyx]

Ok, so what i'm getting at is that the most beneficial for me is putting it either into GICs or PC Financial's savings account, correct? It's not necessary to put it in for only 1-2 years, it's just that i would like to have a car within 2 years; but there is a chance i might just save that up and put down payment on a house instead as i'll be doing engineering internship in 2 years - so more money. Only reason i would like a car is so that i can get to my internship placement. So let's say it's for 3 years, would this change anything? As well, i don't mind locking it as it's basically savings and not dependent on this sum.

[frankal101]

it sounds like a high interest savings account is the way to go. I hear what you are saying about GICs (dont mind being locked in), but my experience through same period in mine and others lives is that you never know when you might need that money, so liquidity is important. Besides, the benefit of added yield on a non-redeemable 3 year GIC (20-30bps or 0.3 of a percent) is hardly worth the having your money being non-accessible... check out rates on moneysense.ca

As far as equity investments, think about it this way - would you be substantially constrained if you lost 10-15% of your capital in the next 3 years? If so, equities is not for you. This would change if you had at least a 5 year time horizon (7-10 preferably). I would be devastated if i was saving up for my first house, but could not buy it when i should have been able to because of general downturn in the equity markets...

Another thing you can do if you have the discipline to not touch your money is open an account with Etrade - they have a cash maximizer account where they offer 4.15% on cash... But be sure to research all costs (is there a fee for not executing a single trade?? or a dormant account?) and dont give in to a temptation to execute a single trade...

Overall PC savings is ideal - no fees, complete liquidity, and a very decent yield. I hope you are also aware that there is taxes to be paid on that 4% return...

cheers

[xtasyx]

Thank you for your thorough response! I guess i'll go with PC's Savings account then. Yeah, i don't mind it being taxed, as long it doesn't tax all of it away haha.

it sounds like a high interest savings account is the way to go. I hear what you are saying about GICs (dont mind being locked in), but my experience through same period in mine and others lives is that you never know when you might need that money, so liquidity is important. Besides, the benefit of added yield on a non-redeemable 3 year GIC (20-30bps or 0.3 of a percent) is hardly worth the having your money being non-accessible... check out rates on moneysense.ca

As far as equity investments, think about it this way - would you be substantially constrained if you lost 10-15% of your capital in the next 3 years? If so, equities is not for you. This would change if you had at least a 5 year time horizon (7-10 preferably). I would be devastated if i was saving up for my first house, but could not buy it when i should have been able to because of general downturn in the equity markets...

Another thing you can do if you have the discipline to not touch your money is open an account with Etrade - they have a cash maximizer account where they offer 4.15% on cash... But be sure to research all costs (is there a fee for not executing a single trade?? or a dormant account?) and dont give in to a temptation to execute a single trade...

Overall PC savings is ideal - no fees, complete liquidity, and a very decent yield. I hope you are also aware that there is taxes to be paid on that 4% return...

cheers

[stevstevd]

Look at rbc's dividend fund if you bought in beginning of 2001 and sold at the end of 2002 you'll have a gain of 1.95%/year which is less than GIC.

This is an old thread I know, but its funny to look back and think that had this guy invested in RBC dividend fund in march 2 years ago, there would be about a 40% loss in the 2 years.

Guess the only thing guaranteed IS death and taxes, but not dividend funds over a 1-2 year period.