Bonds

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I am thinking of buying bonds for 25% of my TFSA as a safety move for the next 1-2 years . Corporate bonds are giving the best rates around 5.9% . Good move? GIC a better move?

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Asked on September 26, 2023 3:33 pm
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I guess that depends on what your views on safety are. If you plan to buy a high grade bond and hold it to maturity, obviously you can avoid all volatility in between. However, bonds are far from stable right now as prices are fluctuating wildly because of the current interest rate market.
There will actually be a time where I add bonds myself, as I see a price recovery in the future when rates are capped. But right now I'm most certainly sitting on the sidelines in terms of the bond market. If inflation continues and policy rates have to go higher, bonds will continue to dip in price.

On the GIC front, obviously there is no volatility there. You buy it, collect interest, and get your money back at maturity

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Posted by Dan Kent
Answered on September 28, 2023 8:58 am