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Investment and Good Returns in Canada?

Toronto Stock Exchange - The Canadian Stock Market

Investment and Good Returns in Canada?

Postby oakden » Fri Dec 07, 2012 4:54 am

I would like to know, If I invest in my saving in GIC or Saving accounts hardly bank could offer 3% to 3.75% of interest, but its risk free.Is there any way that I could earn 7% to 10% of returns invested either in stocks and bonds, if yes how much fee or commission do I have to pay the financial broker,
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Investment and Good Returns in Canada?

Postby fitzwilliam66 » Fri Dec 07, 2012 5:12 am

The return on investment is generally proportionate to the level of risk of the investment.

Canada savings bonds, treasury bills, and government of Canada bonds are the safest investments and have the lowest rate of interest.

Provincial government instruments have lightly higher rates and slightly higher risk; but very safe as well.

There are corporate bonds available that sell at a discount to their par value payable on maturity. These return higher rates again and can range from high quality to junk bonds with double digit returns.

Dividend paying stocks can range from about 0.5% - 5% usually payable quarterly. This includes a wide variety of businesses from oil companies to banks etc. They fluctuate in price and are traded on the Toronto Stock exchange. On-line brokers typically charge anywhere from about $10 - $30 per trade. Stocks typically trade in board lots of 100 shares although smaller amounts are transacted; usually at a slight price premium to buy and discount to sell.

My favorites are income trusts that can payout from 6% - 20% annually again depending on the risk of the underlying business. The government has made these trusts taxable starting in 2011 and these distributions will be up to 30% less as a result. Nevertheless they are interesting investments. They trade like stocks on the TSE as well. Some name brand businesses are trusts including Yellow Pages, Pizza Pizza, A & W, The Keg Restaurants, to name a few.
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