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Time to check out the Q&A inbox and see what’s on your minds. Here are some of your recent queries.

A safe investment, please

Q - I had a $30,000 GIC mature in my TFSA account, for which I earned a princely $666 in interest! I looked at putting the money into another GIC, but the return would be even less. I don't need the money for at least 10 years.

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Can you suggest somewhere safe to put it in the meantime? Most of my investments are in mutual funds and stocks, so I’d like to have a little cushion in something that won’t lose money. Thank you for your time. - Susan D.

A – An investment that won’t lose money over 10 years? If you take inflation risk into account, even GICs and high-interest savings accounts could lose purchasing power over that time. A 10-year Government of Canada bond is only yielding about 0.5 per cent, so you probably don’t want to go that route either.

With a 10-year time horizon, I suggest you consider taking on a small amount of risk with your money. If you don’t own them already, some good utility stocks or a fund that invests in them would be worth considering. These would include companies like Fortis Inc. (FTS-T), Canadian Utilities Ltd. (CU-T) and Emera Inc. (EMA-T). Because most of their income is regulated, the downside risk is minimal, and the dividends appear to be secure. - G.P.

GIC rates

Q – I am interested in what you think about Peoples Group, based in Vancouver. They are offerings some good rates on GICs, which are CDIC insured. – Deb K.

A – Currently, Peoples is offering 2.15 per cent on five-year GICs, including those held in RRSPs and TFSAs. That’s very good in the context of today’s low interest rates, and coverage by the Canada Deposit Insurance Corporation is a big advantage. shows only one CDIC-insured company with a higher five-year rate: Oaken Financial, at 2.3 per cent. – G.P.

U.S. dividends

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Q - I have a number of Canadian dividend-paying stocks in a non-registered account. I don’t have a pension, and this is a way of generating some money. As a snowbird, would it be worth having U.S. dividend paying stocks? I’ve been hesitant due to the 15-per-cent withholding tax. Thank you. – Marc L.

A – If you need U.S. cash flow, this is a good way to generate it and avoid exchange-rate risk. There are some top-quality U.S. stocks that offer very attractive yields right now – check out AT&T Inc. (T-N), for example. Withholding tax that is deducted from a non-registered account can be claimed as a foreign tax credit when you file your tax return. – G.P.

ETF options for mom

Q - What is your opinion of the stability and suitability of XUT for an elderly mother in the near term?

Also, given that XBB has been one of your core holdings to date, do you see continuing to hold that ETF? – Ann A.

A – XUT is the trading symbol for the iShares S&P/TSX Capped Utilities Index ETF. It invests in a portfolio of 16 Canadian utility stocks, including Fortis, Brookfield Infrastructure Partners LP, Emera, and Algonquin Power & Utilities Corp. These are defensive stocks, with minimal upside but limited downside risk.

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The fund has a steady track record with a five-year average annual return of 10.43 per cent to July 31. I would rate it as low-risk, but it has posted some down years, most recently in 2018 when it fell 8.2 per cent.

The latest monthly distribution was $0.095 per unit. If that were to continue over the next year (no guarantee), the yield at the current price would be 4.25 per cent.

If you’re looking for a defensive fund with a respectable yield for your mother, this would be a good fit.

XBB is the symbol for the iShares Core Canadian Universe Bond Index ETF. I regard this as a core bond holding for all portfolios. It’s offers stability to a portfolio and has generated an average annual compound rate of return of 4.46 per cent over the decade to July 31. – G.P.

Value stocks

Q – What is a value stock and can you give me some examples of value stocks? I read an article about them but it was somewhat confusing. Two of the stocks suggested were ExxonMobil and Johnson & Johnson. - Richard C., Toronto

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A – Investopedia defines a value stock as one that trades at a lower price relative to its fundamentals, such as dividends, earnings, or sales. Such stocks usually offer a high dividend yield, low price/book ratio and/or a low p/e ratio. Value stocks typically trade at a bargain price relative to their peers.

I wouldn’t classify Johnson & Johnson (JNJ-N) as a value stock. It has a p/e ratio of over 26 and a dividend payout of 2.73 per cent. ExxonMobil (XOM-N) has a p/e of 25.83 and a dividend of 8.09 per cent. The high dividend suggests the market believes it is not sustainable and likely to be cut, which would hurt the share price.

Two stocks I suggest fall into the value category as defined by Investopedia are Canadian Utilities (p/e of 14.95, yield of 5.25 per cent) and U.S. telecom Verizon (VZ-N) (p/e of 12.73, yield of 4.2 per cent). Also, the bank stocks look like good value plays at this time. – G.P.

If you have a money question you’d like answered, send it to me at and write Globe Question on the subject line. I can’t guarantee a personal response, but I’ll answer as many questions as possible in this space.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

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