Making a contribution for an RRSP or even to a TFSA is not the finish of the story plot. That’s the conserving step. The cash must then earn a come back. What are some options and current returns among the various possible types of investments (see previous post Investment Building Blocks – Securities to get more explanation)?
Inflation surreptitiously eats away at the worthiness of your cost savings if it is within a tax-deferred RRSP or TFSA. It cannot be avoided by you. Leaving the money sitting as cash these days gets interest of 1% or so from major banks, even in a savings account (see rates on CANNEX). CANNEX also provides a complete table of rates available in registered plans. Rates again is quite low. Returns on bonds are the interest and possible changes in capital value due to changes in default risk and interest rate risk. The maturity longer, the greater the chance of interest increases. The examples below are investment-grade bonds.
- If you itemize, then
- Paid cash to owner for personal use, $2,500
- Identify the best performing, highest liquidity, lowest cost alternative
- A single person
Lower ranked bonds will give off greater yields (see prior post-Seeking Safety: Assessing Default Risk). There are several individual problems with varying returns, but the dividend yield of the following give a basic idea of the much more attractive returns available among preferred. See Prefblog for much in-depth knowledgeable discussion of particular issues.
Many of the business enterprise trusts are being converted to straight corporations or being bought out but numerous others still remain and their distribution produce remains high (see 2009 post-Income Trusts: a Neglected Opportunity?). Disclaimer: this post is my opinion only and really should not be construed as investment advice. Readers must be aware that the above comparisons aren’t an investment recommendation. They rest on other sources, whose accuracy is not guaranteed and the article might not interpret such results correctly. Research your options prior to making any decisions and consider consulting with a professional advisor.
For what’s not at this time clear. I’ll believe China would today prefer the position quo. They’re in no rush for a confrontation – financial or otherwise. It could suit their goals to pursue the constant, disciplined execution of their long-term strategy. China is willing to make limited concessions – but you will see no backing down. Zero sign of weakness; no inclination to give in to Trump.
Willing to combat “at any cost.” The strongman Xi having lately achieved an incredible power grab domestically, won’t shy away from the opportunity to demonstrate his power on the global stage. And he’ll enjoy frustrating local support when confronting the U.S. For the Chinese, the impetus of “Trump tariffs” goes way beyond trade.
The Trump administration looks for to rein in China’s global superpower ambitions. China always promises it will “never succumb to external pressure.” Finally, they have attained the power to regress to something easier the bravado. Better to move decisively to bloody Trump’s nose wrestling over trade. You can make the debate that the Chinese Bubble creates the kind of acute financial and financial fragility that dictates a cautious approach from Beijing. The counterargument is that we now have advantages domestically – and enough historical precedent – for villainizing foreigners. The great Chinese “meritocracy” has badly mismanaged key aspects of financial and economic development – the steep costs that will surface when the Bubble finally succumbs.