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Given the current stock market turbulence, should someone in their seventies put all of their registered retirement income fund in guaranteed investment certificates?

A reader asked this question after the March stock market plunge, a particularly sudden and vicious decline that shook the confidence of investors at all stages of life. Some wonder whether they want to ever go through that experience again, which leads to questions about chucking stocks and just using GICs. Here are five questions to ask yourself if you’re thinking of making the switch.

Can I meet my financial goals with GIC returns?

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Will the modest returns of GICs be enough to keep your RRIF from running dry before you die? A 70-year-old might easily have two decades or more of retirement ahead. Switching to GICs is easiest for investors who know they have enough for a lifetime and don’t need to take risks.

Will I be tempted to get out of GICs when the stock markets are hot again?

Buy a GIC and you may find yourself coming up for a renewal at a time when stocks are flying again. The risk in switching back to stocks is that you buy in well after big gains have been posted. There may be limited upside before the next bad year.

Do I need more liquidity than GICs provide?

There are cashable GICs, but you pay for that feature through lower interest rates. The traditional GIC can be redeemed prior to maturity, but you should expect a stiff, prohibitive penalty. A high-rate savings account might be a better spot than a GIC for money you may need to dip into.

Do I have access to the best GIC rates?

The highest GIC rates come from alternative banks and credit unions that typically sell directly to investors. If you hold your RRIF at an investment dealer or online brokerage, your selection of GIC issuers probably won’t include these players.

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What is more important to me – avoiding losses or making gains?

In the field of behavioural economics, there’s a concept called loss aversion that weighs the pain of losses versus the pleasure of making gains. It’s generally thought that the pain of losses is double the pleasure of gains.

-- Rob Carrick

This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you or you’re reading this on the web, you can sign up for the newsletter and others on our newsletter signup page.

The Rundown

Why markets won’t retest March lows (and two TSX stocks to buy for these unsettling times)

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Could we retest the March lows? This is the key question on investors’ minds and a concern that’s been keeping many conservative buyers on the sidelines. The Globe’s equities analyst and investment reporter Jennifer Dowty shares her views - and has a couple suggestions for growth stocks that investors may want to consider.

A technical analyst’s take on where markets are heading next

Long-time Canadian veteran technical analyst Ron Meisels doesn’t think markets are out of the woods yet. Forget 'U' or 'V' shaped recoveries - he’s forecasting either an 'n' or 'm'. Read his chart-based analysis here.

Others (for subscribers)

Research report: Canaccord Genuity’s top stock picks for playing offence or defence during the COVID-19 pandemic

The week’s most oversold and overbought stocks on the TSX

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Friday’s analyst upgrades and downgrades

Thursday’s analyst upgrades and downgrades

Thursday’s Insider Report: Buy and sell trades that four chairmen have made

Number Cruncher: Six food retailer stocks with sustainable dividends

Number Cruncher: Seventeen U.S. big caps with higher yield and lower volatility

Others (for everyone)

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In U.S. companies’ earnings, words may matter more than numbers

Fed’s bond purchase program closing price gaps in ETF market

Third Point shifted portfolio to credit after coronavirus selloff

Hedge fund Elliott says stocks could fall 50% from February highs

Locked-down investors aim algorithms at chaotic currency markets

Dividend futures bounce indicates despair lifting

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What’s up in the days ahead

The stock market’s impressive recovery over the past four weeks in the face of surging unemployment and vanishing economic activity is making a number of influential observers concerned about what comes next. David Berman this weekend will analyze what investors may now face.

Click here to see the Globe Investor earnings and economic news calendar.

More Globe Investor coverage

For more Globe Investor stories, follow us on Twitter @globeinvestor

Click here share your view of our newsletter and give us your suggestions.

You may also be interested in our Market Update or Carrick on Money newsletters. Explore them on our newsletter signup page.

Compiled by Globe Investor Staff

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Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

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