Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

One of things that surprised me in the pandemic was the number of people who had put their savings into the stock market rather than a safe, low-return, boring savings account.

The sudden crash of stocks in March reminds us that the potential for great returns may not offset the higher risk levels of putting your savings in to the market. The best you can get on savings is roughly 2 per cent these days, and the S&P/TSX composite index made almost 23 per cent last year on a total return basis (share price changes plus dividends).

Peak to trough in 2020, the index fell about 37 per cent. There’s been a serious bounceback, but stocks were still down 9.7 per cent for the year through May 31. Meanwhile, savings accounts keep paying 2 per cent at most.

Story continues below advertisement

How do you know when your money should go into stocks? Investment adviser Ben Felix, our guest in Episode Five of the Stress Test podcast, suggests something we’ll call the 10-year rule. “As a general guideline, if you’re thinking about putting money away, and you know that you’re not going to need it for 10 years or longer, you can be taking a fair amount of risk,” Mr. Felix says.

Ten years is long enough for the higher return potential of stocks to overwhelm the downside risk. Stocks have been down for five-year periods before, but 10 years of negative returns is extremely unlikely. For the 20 years to May 31, the S&P/TSX composite index was up an average annual 5.2 per cent.

The 10-year rule is crucial for people who are saving for near-term goals like buying a house or paying for a wedding. It’s a battle to save up for these goals. Don’t sabotage yourself by exposing your savings to the risky stock market.

Final word to Mr. Felix: “Your savings should be guaranteed, in my opinion.” That means a savings account.

🎧 Catch up Stress Test: How to survive the gig economyHow to get out of debtIs now the right time to buy a house?Crisis-proof your financesWhat you need to know about investing right now


Subscribe to Carrick on Money

Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here. Do note, however, that I will be on break, returning with a newsletter July 21.


Rob’s personal finance reading list…

New mortgage rules started July 1

Story continues below advertisement

A handy rundown on changes for buyers who have a down payment of less than 20 per cent – basically, they make it a little big tougher to qualify for a mortgage in terms of your credit score and overall debt burden. One notable mortgage trend since the pandemic began is increased demand for fixed rate mortgages over variable rate. Makes sense – variable rate mortgages don’t have much room to go lower, and fixed rates are incredibly low.

‘One summer I leased a TV set’

Investment and lifestyle write Rita Silvan on how Ontario’s new math curriculum, with its inclusion of basic financial literacy, might have helped her avoid some money mistakes in her younger years. “One summer, I leased a TV set so I could watch Blue Jays games and ended up paying for that crappy set about 10 times over.” Forgivable if that was during the world series years.

DSC mutual funds should be done like dinner

A connection is made in this article between mutual funds sold with a deferred sales charge (applies if you sell within six or seven years) and racial and financial inequality. DSCs are typically charged on small accounts.

Cashback cards are king

Story continues below advertisement

A study of how credit card trends have changed in the pandemic shows a marked preference for cashback rewards over travel. Makes good sense, given the hazy outlook for travel.

Ask Rob

Q: Is now a good time for us to enter the housing market, or should we wait for a few months? We are first-time home buyers.

A: I covered this topic and much more about real estate in the COVID era in an Instagram Live with Globe personal finance editor Roma Luciw.

Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.

Today’s financial tool

A useful primer on capital gains taxes in Canada. Expect speculation about a capital gains tax hike in the years ahead as we grapple with the costs of supporting the economy in the pandemic.

Video of the week

A trio of women with expertise in financial literacy and learning talk about the financial fallout of COVID-19, and how to ease your money worries.

Story continues below advertisement

In case you missed these Globe and Mail personal finance-related stories

  • Renovation and home-improvement spending booms as COVID-19 changes consumer habits
  • Gordon Pape: Three overlooked income stocks weathering the COVID-19 storm (for Globe Unlimited subscribers)
  • Canadians need money fast in the pandemic. So why are so many still using cheques? (for Globe Unlimited subscribers)

More Carrick and money coverage For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group. Send us an e-mail to let us know what you think of my newsletter.

Please note, I will be taking a break, and returning to this newsletter on July 21.

Want to subscribe? Click here to sign up.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

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 .

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 .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies