"GIC Yields Hold Their Ground" | GIC discussions | Discussion forum

So,what are the alternatives to GIC's
1) Stocks, including mutual funds
2) Bonds
3) Real estate

Perhaps a mix like President Ronald Reagan suggested:
1) 1/3 in cash
2) 1/3 in fixed income
3) 1/3 in equities
4) 1/3 in real estate

Reagan never offered financial advice, let alone the 4/3 “strategy”. I am struggling to find obvious fabrications funny.

Also, cash is “fixed income”. This looks like someone screwed up the Talmud “investment portfolio”:

- 1/3 in real estate (land or physical property)
- 1/3 in business (eg equities)
- 1/3 in cash or liquid assets (bonds and hisa using modern equivalents)

Not a bad advice, considering it's 1500 years old. GICs don’t neatly fall into any of these categories. But if you want some, they would make up a fraction of the last bullet as long as you keep enough liquidity.

canadian.100 said

Cash is not "fixed income". Cash is categorized as a "current asset" on a Balance Sheet.
I have seen GICs categorized as either "Current assets" if maturing within a year or "Long-term assets" if maturing in more that one year.  

It doesn’t really matter but Morningstar counts cash as fixed income and so do I.

Morningstar includes cash within fixed-income sectors. Cash is not a bond, but it is a type of fixed-income.

https://www.morningstar.com/content/dam/marketing/shared/research/methodology/829856-Morningstar_Global_Fixed_Income_Classification_Methodology.pdf

The issue with GICs isn’t classification but lack of liquidity (in most cases).