The Canadian Investor - ETFs to consider and how to get some returns on your cash

Episode Date: September 16, 2020

In this episode of the Canadian Investor Podcast we discuss ETF ideas for your portfolio and we discuss some options for keeping cash on the sidelines.Tickers of stocks & ETF discussed : XIC.TO, VCN.TO, XUU.TO,VFV.TO, XEF.TO, VEE.TO, ZAG.TO, XAW.TO, VAB.TO, VGRO.TO, AAXN, CQQQ, BPE, IHAK, MTCH, ADSK--- Send in a voice message: https://anchor.fm/the-canadian-investor/messageSee omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

coming through the pipeline or simply want to lower the risk of your overall investment portfolio, EQ Bank's GICs are a great option. The best thing about EQ Bank is that it is so easy to use. You can open an account and buy a GIC online in minutes. Take advantage of some of the best rates on the market today at eqbank.ca forward slash GIC. Again, eqbank.ca forward slash GIC. Live from the great white north, this is the Canadian investor where you take control of your own portfolio and gain the confidence you need to succeed in the markets. Hosted by Brayden Dennis and Simon Belanger. The Canadian Investor Pod. I'm Brayden Dennis, as always joined by my co-host, Simon Belanger.

How's it going, Simon? It's going well. I mean, you're getting better at saying my name now. I think we're just going to have to record that and just replay it over and over on a loop. It's because we have the skype video on so now uh now we have the chemistry going again there you go there you go it's good so fun fun story for you i bike to and from the office and i just biked home and i saw a guy with a tFI International, like the trucking company. He was wearing the bright yellow safety vest, and he was just driving a regular van.

And inside of the van, I don't think one more package in cardboard boxes could have possibly fit inside of the van as he was at the front door dropping off an Amazon package. And as a shareholder, this is the stuff that I love. Like boots on the ground seeing some of these companies because you got to know what you own. And there is so much tailwinds in last mile delivery. And that's why I own the stock. And that just felt really good, man. So I know you probably feel the same way when you see some businesses you own doing well.

Well, you can see with their own eyes. Oh, yeah, definitely. It's always fun when you're an owner and you know that what you're seeing is definitely coming back to you in some form or fashion at some point. So it's always nice to see. Because this guy had like hundreds of these little packages in his own van. It was great to see. Today, we're talking index investing through ETFs a little bit. Some more niche ETFs, where to park cash.

I will kick it off. When I'm talking you two ETFs, and they have the same management fee, and they have the same holdings, or even if the management fee is slightly different, it does not mean that one is significantly better than the other. Because next year, maybe black rock will have the cheaper one and vanguard will be lagging by by one basis point like it is such a small difference so do not split hairs if you own one and now the vanguard one's cheaper like don't go into your brokerage account and sell it because it's not going to make any material difference at all. So now that that's out of the way,

this is like the MVPs of index investing, because it irks me when I see index investors or ETFs, ETF users, buying high management fee index ETFs from whatever it may be that their advisor is giving them because their advisors might be incentivized in ways that you don't know about to give you a high management fee ETF. And that makes me very frustrated. So, without further delay, the MVP, in my opinion, of the geographical region of Canada is the iShares Core S&P TSX capped ticker XIC. It has a management fee of 0.06 and has 230 holdings. It's obviously market cap weighted. So this is going to own 230 companies in Canada.

This is Canada's best known index. Alternatively, if you own the Vanguard version VCN, it's 200 holdings at the exact same management fee. Since it's market cap weighted, that is completely apples to apples. So your best options are VCN and XIC. Moving on below south of the border in the US, the ETF that I personally like and I have always held when I'm owning the broader US market is BlackRock's iShares Core S&P Total Market Index, ticker XUU. And this holds like thousands of US companies with a management fee of 0.07%. If you want to just go with just the S&P, Vanguard's VFV for nine basis points,

aka 0.09, is going to track the S&P 500 for very, very cheap in Canadian dollars, by the way. These are all actually in Canadian dollars. Internationally, the one that I typically use is XEF. This is broad coverage of Europe, Japan, and Australia. And this is, again, the iShares one.

I am completely agnostic to who distributes the ETF. If it's Vanguard or BlackRock, I could care less. If they're giving me broad index exposure for the cheapest fee, great. So that is ticker XEF, thousands of stocks, to be exact, 2,654 stocks. That is ticker XEF. You're going to get international exposure, but not emerging markets. Now, if you want to combine that internationally with emerging markets stocks, Vanguard's ticker VEE, the Emerging Markets All Cap Index, has over 5,000 stocks for 0.24% from Vanguard.

It has Chinese weighting, Indian weightian waiting brazilian waiting and more over 50 of that will be in china and you're going to get exposure to emerging markets and for 24 basis points this is the way to do it in my opinion so you can get global international like without north american exposure with xef and vee combined now if you want to keep it simple you can combine xef and vee by just owning iShares all country except Canada, ticker XAW for, again, 22 basis points again. Almost 9,000 stocks for a really, really cheap price. So say you just own Canadian stocks and you're like,

wow, I really need some international exposure. With one click of a button, XAW is going to give you 9,000 holdings. So very, very diversified for a pretty cheap fee. And if you are an index investor, these are gold. All right, let's talk bond indexes. One second while I go to sleep really quick. But the best option, option well it's a tie really bmo has a ticker zag zag for eight basis points or vanguard has vab also for nine basis points or i guess zag is eight basis points that's that's a clear winner that is the clear winner okay BMO, 952 bond holdings for eight basis points. If you want fixed income bonds to stabilize your portfolio, there you go. Now, if I posted this podcast on Reddit, Personal Finance Canada, and I didn't mention Vanguard's growth ETF portfolio, VGRO.

They'd be like throwing stuff at me because everyone seems to be obsessed with it. It basically owns 80% stocks globally and 20% bonds. So the idea is that you just own this one ETF and you just buy it and dollar cost average it and keep holding it. Sure, if that's what you want to do, VGRO, you're going to pay up a little bit, 25 basis points on the MER, save you a bunch of transaction fees if you're with a bank and it costs you money for each transaction fee. Go for it. I'd rather be in 100% stocks. But again, it's completely up to what your risk tolerance is. So again, I just threw a bunch of tickers at you. But these are the ETFs that have the lowest fees possible for broad base diversification, instant diversification of hundreds, if not 1000s of stocks, not only in Canada, but also internationally. So Simon, if you want to get

more granular and say, I don't want to own just all of the S&P or thousands of international stocks, I'm really bullish on one particular sector. There are sector-based ETFs. I'm a fan of them. There are sector-based ETFs. I'm a fan of them. You're a fan of them as long as the management fee is reasonable. What are some that you're looking at these days? Yeah, exactly. So it's a great way to invest in a sector or country or a trend that you're not necessarily super familiar with and you might not want to go into detail and learn and select individual companies,

but it allows you to get a part of that potential growth that you could see in. So before I get into those, an easy way if you guys are looking for some ideas for ETF, I find that ETFDB.com is a good place to just get some ideas if you're not sure and to if you're looking for specific sectors and things like that it'll actually let you to allow you to sort by the expense ratio which is always great for a specific sector so you can always start there if you're looking for idea some ideas I do that myself and then just sort it by expense ratio that That's the easiest way. But there's three ETFs I identified that are interesting plays right now. The first one, you guys might be familiar with QQQ,

PowerShares Invesco Technology ETF. So that is for the U.S. sector. I believe it follows the NASDAQ in terms of holdings. But there's one that's a bit lesser known, and it's ticker CQQQ. It is traded in the US. It's not Canadian traded. It's the Invesco China Technology ETF. So for those of you that think China has a lot of room to expand their technology sector, that is an interesting play without having to select specific companies the expense ratio is a bit higher it's 0.70 and so

not quite you know it's below 1% so it's good and it's not unusual to see 0.50 or 0.70 percent in those type of ETFs that are more focused on a sector more focus on a trend because oftentimes they'll be a bit more a bit more involvement in in those type of ETFs by the the fund managers so that's why they're a bit higher in terms of fees compared to what Braden just mentioned so the Invesco China Technology ETF for that one, for example, so it has Tencent, it has Meituan Yanping. So that's a online shopping platform that I was not very familiar with, Baidu, and a bunch of other old things. So it's a great

way to do that China play. Again, I think we've mentioned it before. China, there's sometimes the transparency is not always there. So even if you're investing in that ETF, be aware that, you know, the accounting principles and the transparency is not the same in China than it is in the US or Canada, obviously. The second one, I know we've had people talking about cybersecurity and some of the questions that we've had. So one interesting one, and there's a few of them, is IHAC. So it's I-H-A-K. So I-Share Cybersecurity and Technology ETF. So this one, the expense ratio is not too bad, 0.47%. So it's definitely reasonable for a kind of a specific ETF. I mean, it has a, I don't have the amount of holding and looking at the fact sheet right now, but it has a decent amount of holdings as well. And then some of the most prominent holdings, you'll see crowd

strikes, you'll see DocuSign, obviously, that's kind of cybersecurity if you stretch it a little bit, but there are some interesting plays in there. Palo Alto Networks, just some names I kind of recognize. Otka as well. So that's an interesting one. The last one I wanted to mention is PBE, Invesco, Dynamic, Biotech, and Genome ETF. The reason why I wanted to mention that one is I think it's kind of the way of the future. This one is 0.57 expense ratio.

So again, not as low as the broad market base index funds that Brayden was talking about, but still reasonable, has 30 holdings. And if you really don't know too much about this sector, and I'll admit I am one of those people, then it is an interesting ETF if you want to play in those. But this one is probably going to be very volatile just by the sheer amount of holdings because there's only 30 holdings and it's a sector that is super volatile. So just be aware of that, but that is a way to play that trend. So those are the three that I identified that are obviously different than the broad market index ETF. As do-it-yourself investors, we want to keep our fees low. That's

why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly.

Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Calling all DIY, do-it-yourself investors. Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends,

and there's other stuff like learning Duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up. Some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there. There's one thing that I'd like your opinion on, I know we share an opinion on this, is why would someone go ahead and own

something like CEQQQ, the Chinese technology ETF, versus going on to the prospectus, by the way, that's another fun fact, is a great way to find out companies in these secular trends is go on the prospectus, the fact sheet of these ETFs, look at the top 10 holdings, they have to list them, and see what's inside of it and do some research from there, because there might be some names that you like owning separately. So that brings me back to my question. If I'm looking at that Chinese ETF, since its market cap weighted, we're going to have a lot of Tencent, a lot of JD.com, a lot of Alibaba, for instance. What would be the advantage of owning just the simple Chinese tech ETF, paying that management fee versus picking the top three holdings? Is there upside you see from holding a bigger basket? Yeah, I think there is. Obviously, there could be upside if you just select your stock. I mean, there's a few reasons why you'd want to select an ETF like that. First of all, you don't want

to take the time to necessarily do the research and keep track of a specific company. It's a market also that you're not as familiar with. So it'll be able to give you even if it's some of their smaller holdings. So I'm looking at the CQQQ right now and Tencent is 10%. Well, there's companies that are 2-3% or lower and these companies could really blow up and affect your returns. And you've never would have invested in them without the CTF because you didn't know anything about them. So it does give you a bit more, obviously, diversification and upside in that matter. But it's a good thing because not everyone has time to research companies and go into the detail like Braden and I will do for the different companies that we invest in. So for me, it's kind of a personal decision to do and just be honest with yourself.

Do you have the time to stay on top of your holdings? If you don't, if you have a limited amount of time, then ETF strategy is probably the best thing for you. Yeah, you nailed that. I mean, the time one for sure. That's why we list these broad-based index ETFs. One, you don't have the interest, the care, or you're just happy with plugging away on these broad-based index funds,

which have performed through time exceptionally well. That market return has beat many, many professional mutual fund managers over time. So that's, that's, that's one. And yeah, the upside of that 2% holding is so high, even if it is such a small percentage of the bigger fund, if that 2% holdings a 10 bagger, it's going to drive impressive, impressive returns. And it's going to be buying more of it as it grows, because they kind of are forced to, since it's market cap weighted, as these companies, these smaller ones have these great rises, the ETF is going to be buying them in, it's going to be buying more and more of it as it rises and can become more important

in terms of it the funds returns because it is market cap weighted and this is why we saw i've i really thought the tesla would not come back into this podcast but here it is this is why we saw s&p standard employers say we're not bringing're not bringing Tesla into the S&P 500. We don't care that it's over $300 billion in market cap and that it has had four profitable quarters and probably should be in the index. It's too volatile to be in there, right? So these are the kinds of things.

As these indexes are made, there are certain decisions that are made if it's, like, for instance, standard pours. They decide who goes in and out of the index. So you're getting a slight free management almost in terms of prudent allocation of those funds. You know what we should do is every time we're about to mention Tesla, just say like, you know, the movie Old School. Earmuffs. Earmuffs.

That's a hilarious movie, by the way. So people will know that we're about to talk about Tesla and they just get muted for the next minute or so. Frank the Tank. Yeah, exactly. I should rewatch that. that yeah it's a good movie it's a great flick so those are some those are some etfs that you can look at you know as a rule as they get more niche you're gonna pay a higher management fee but if you strongly believe

of some secular trend like you mentioned cyber security or I'm sure there's one on payments. I should probably just own that ETF at this point. There are. I'm sure there is. But, you know, I've already handpicked a few out of there, as you know. So there are ways to play it. You go, I don't know who's going to be the winner here, but I know that this total addressable market is not only massive right now, but is currently untapped.

It's going to grow. And even if company X doesn't win most of that pie, the pie is so appetizing that the returns as a group are going to be really good. Even if one of them sucks, the returns of the group might be incredible. And that's why you'd own something like that. Yeah, exactly. And I would say as a general rule of thumb, if you're looking for more specific ETFs I would disregard anything above one percent you know close to one percent I guess if there's not much choice in that type of niche ETF

but like you guys saw I think if you're staying around 0.5 0.7 I think that's reasonable for a bit more of a niche ETF and if you are are a Questrade user, you can buy these things for free. ETFs are free to buy. Pay $4.99 to sell them, but you're free to buy. So if you don't have an account and you sign up and you use code S-I-50, you're going to get $50 in free trade commission and you support Simon and I. So that is ticker, not ticker. I just said ticker. That is code SI for stratosphere investing, and then 50 for 50 in free trade commission. So that's a huge plus, you know, you get to buy those you get to dollar cost average into these into these index ETFs or niche ETFs. If someone tells me

they are like what some people call like the couch potato investor and that they own just like one or two broad-based ETFs and call it a day, add to it every quarter, add to it every year, whatever it is. I love that. I absolutely love that because you're going to stay the course. You're not going to make too many trades. You're going to not freak out when the market drops because you understand you have thousands of holdings and that no one of them failing is not going to make any difference in the grand scheme of things. So I love that. Speaking of asset allocation, which a lot of this show has been about,

a lot of people are holding a lot of cash. There's no question. We've seen saving rates go up. Saving rates are at an all-time high despite a pandemic. Definitely some stimulus has been a part of that. So Simon, if I'm holding a bunch of cash and I don't want to invest it for some reason,

I'm saving for some shiny new toy or maybe a house or whatever it may be, it doesn't matter. What's a good way to hold cash? And we've talked about this before, but it's always changing, and especially with interest rates dropping off a cliff, you might not be getting those high interest saving rates accounts. So I'm interested to see a little update on this. Yeah, so there are options where you can get a decent, like, I mean, you'll see what I mean by decent return.

Decent asterisk. Yeah, exactly. I mean, it's not great, but it's better than getting zero. And it's better than giving that money to a bank that barely gives you any interest whatsoever. So I think what you need to ask yourself, first of all, is how quickly do you need that cash? Do you want it to be extremely liquid and available right now? If that's the case, then I'll just go down some of the options and if you do don't need it like right now say for example you're about to retire in about five years so you're just building a cash portfolio to give yourself a cushion and you know that you won't need the money immediately this year or next

but maybe in the next three to five years so there's other options that could offer be available for you in that. But if you need the cash right now, best example of that is, say you want a little cash on the sideline as ammunition in case of a company you're looking at, you're just hoping to get a pullback to start a position, or if you need an emergency fund. As a side note, I'm super glad I had a good emergency fund because we just bought a house earlier this year. And if we didn't have a good emergency fund, I probably would have had to sell some stocks because we had a lot of unexpected expenses come up with the new house. So just to give you guys an idea of why you want an emergency fund. Yeah, go ahead, Brayden.

No, I was going to say, dude, congrats. You're an adult. Look at you go. Look at you go. I mean, it would have been too bad, especially if I would have been stuck to sell stock in March, for example. And if you don't have an emergency fund, sometimes you just don't have a choice and sell and you don't pick the time. So you have to keep that in mind. Fund sometimes you just don't have a choice and sell and you don't pick the time so you have to keep that in mind and that is that is that the inherent return I mean people talk about how cash doesn't have a return and and I think that's complete garbage because look at the inherent return on the cash you you were able to use instead of selling something in March, you were able to just hold or buy more.

And if you've followed the stock market or haven't been asleep for the last six months, you've known that if you bought in March, you made a lot of money on pretty much anything you bought, some more than others, for sure. But that's the kind of inherent return and the power of having cash. So I think that's an important point. Yeah. And it's even more true right now, because whatever, you know, no one can predict what the next six months to a year to two years will hold. We're in unprecedented times right now. So, you know, you don't know what can happen. You might think you have job security, but, you know, you might not in six months. So that's, it's especially like,

it's always true to have an emergency fund, but I think it's even more true right now. So let's just say if you're looking for something very liquid, your best option is probably going to be just to put that money in a savings account. The first thing you'll want to make sure, especially if you're not going with one of the big banks, and I recommend not going with one of the big banks if you're using a savings account, but make sure they're CDIC insured. So CDIC is the Canadian Deposit Insurance Corporation. You can just go to cdic.ca. You can look whatever financial institution on their website and they'll let you know if it's insured. And if it's insured, you'll be insured for your deposit up to $100,000 by the

Canadian government. So that is the absolute safety right now, right there. Definitely check if you're not familiar with the financial institution, just because some of them that you might not be familiar with are some of those that will offer the best interest rates and a lot of them are insured by the CDIC. So a few that you may want to consider so I just pulled some rates so I personally have my savings account with Motive Financial they currently offer 1.75 on their savings account it's actually a division of canadian western bank people might be familiar with that a bit more so they are cdic insured uh eq uh bank savings account as well offers 1.70 i know brayden you're

familiar with that one um i think are you a share familiar with that one. Are you a shareholder of that one? I've been a shareholder of Equitable Group, the owner of EQ Bank, since the collapse of the stock prices of Home Capital Group and Equitable Bank, or Equitable Group in that case. Home Capital had the fraudulent book and their stock dove 50 percent in two trading days and so did their biggest competitor equitable bank and that was one of my best trades ever because now all of a sudden your competitor is in deep trouble. Your number one competitor is in deep trouble.

And because of that, the entire group got sold off because of a problem with the leader, in that case, home capital. to grab that because, I mean, obviously your competitor is in trouble and your stock price just fell 50% for no real inherent reason other than as a group, they all fell 50% in the matter of 48 hours. So I'm patting myself on the back. That was a pretty good trade.

Yeah, well done, well done. So yeah, all that to say you can get decent interest rates with those type of financial institutions. For the most part, they'll be online banks. But I mean, I'm with Motive. I'm with Tangerine as well. And Tangerine, I'll just put an asterisk next to them. They tend to have promotional rates that only last for a few months. And then the interest rates drops way way down so you may see higher rates but in reality it's only for a limited amount of time and then after a certain amount of time you just kind of drop to pretty low rates so keep that in

mind I only have my checking account with Tangerine but my savings account is with Motive Financial but if you do some digging you should be able to find at least 1.5 percent and trust me if you have like a good amount a good sizable amount of cash for your emergency fund let's say you have like 10 15 20 000 depending on what your income is you might require that big of an emergency fund that 1.5 percent makes a big difference especially when you compare it to the big Canadian banks, the traditional ones. They offer like 0.2%, 0.1%. It's ridiculous, the interest that you get. So I understand it's a bit of a pain to create a new account somewhere,

but it's not that difficult when you do it online. It takes you maybe 15, 20 minutes. They have to verify you. That takes a few days, and then you're good to go. So if you're willing to put in the work and keep in mind, like if you have $10,000, that's $150 a year, potentially more that you're kind of making on that money versus barely getting any interest. So that's something I would recommend. It's very liquid, so it gives you flexibility. You get that emergency or you want to pull the trigger and buy a certain stock. The cash is right there available for you.

As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by Money Cents. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call

or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Calling all DIY, do-it-yourself investors. Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends,

and there's other stuff like learning Duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up. Some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there. Another option if you have a trading account and you can't put it in a savings account

within your trading account, there's psa.to and that's just a money market fund and essentially it'll give you 0.60 percent yield so 60 basis points it's not that high but it's better than most trading accounts will give you the only thing with those is they're not insured by the cidC. So just keep that in mind. When you invest in that, it's not as safe as the savings account. I've had money in PSA.TO before. It's fine. I have not had any issues with it. you want to let's say you're close to retirement or you're retired and you want to keep a cash cushion of say five years then GIC might be an interesting option for you. GIC again it's guaranteed by the federal government and the GICs itself they won't give you super high percentage but there is one type of GIC that actually gives you like upside. So they're market-linked GICs. Brayden, have you ever heard of those?

A market-linked GIC? Yeah. So I'm going to say no just by your reaction on the video. No. See, the video is good, man. It's good stuff. No, just because I don't think it's something I would have ever been in the market for. No pun intended.

But, uh, give me, give me, no, it is available. Yeah. So, um, that's something I looked into for my parents cause my parents are retired and I want to keep them a five year cash cushion. And, um, it's really, I mean, you don't like, as I just mentioned, you know, you're not getting great returns, whatever option you're looking at. So the MarketLink GIC will usually link your returns with the stock market. So it could be the, it'll tell you what the stock market or what index they're looking at. So it could be like, you know, the Canadian banks index could be the TSX index,

utility index, like all these. And what they will do is they will guarantee you a basic return. It will be very low. It might be like 1% per year or something like that, or 0.5% per year. But they'll also give you some upside. So depending on the MarketLink GIC, some of them you could get up to 25-30% for a five-year GIC, depending on how the index does. So what they do is pretty simple. They'll give you that base interest. So let's just say 1%. So if the market tanks in those five years or the index tanks,

you'll get your capital, so your principal, plus that 1% for those five years. But if the market or the index goes up 30% in those five years, you could get up to 30% depending on what the cap is. So the cap, there's usually going to be a cap, I've seen 15, 20, 25, 30%. The cap will be higher if the time period is higher. for five years for example if you have a 20 percent cap and in that five year period the index goes up 30 percent well they'll actually give you the 20 percent worth of interest for those five years so it won't be 20 percent per year but it'll still be 20 percent for those five years which is way better than you would have gotten with pretty much

anything within that period that's guaranteed, right? Especially in this environment. Oh, yeah, definitely. Yeah, exactly. I mean, you might think, say, the market's overvalued and whatnot. You know, maybe it is, you know, for traditional metrics, there might not be that much upside, but at least you got some upside and you have, you know, the guaranteed money that your principal stay intact. You have a small percent that you're guaranteed to have and then you have that upside.

So if you're you're retired or you're close to retirement and you really need to start decumulating, that is something that you could do. And you can even kind of stagger it. So you get a GIC that maybe expires in three years, one in five, and then even kind of stagger it so you get a gic that maybe expires in three years one in five and then you kind of stagger them like that so you have money coming in on a regular interval well simon you just i try to learn something most days and you just told me about a new financial instrument i've never heard of so there you go before we wrap this show up we've been talking about personal finance and etfs which are important but uh let's talk stocks for one moment what is on your radar right now what's on the watch list something you're really excited about just just just one stock yeah i mean i think i'm gonna have to go back to the last stock I pitched,

if I remember correctly, was Axon. Yeah, Axon. So yeah, I did some more research on them. And you know what, I think I'm probably going to be starting a position the next couple weeks here. The more I do research, the more their business model is really interesting. They really have solid management. They have really actually a quite diverse board of director as well. I was surprised how so there's women, there's people of different backgrounds in there. So it's really interesting to see. And really, the the CEO says all the right things and has been saying the right things for years and years. right things and has been saying the right things for years and years. And he really wants to help the world use non-lethal force and help transparency for law enforcement as a whole. And I think that's

a good thing in the environment we're living in, in terms of my personal beliefs. But their revenue have been exploding pretty much like 25% a year. And they're kind of flying under the radar. Like no one, people don't really talk about them. And their SaaS business has grown from being about like 5% of their total revenue to 25% recently. And it's growing at a really quick clip per year. So yeah, that's the one I'm considering starting a position soon. Look at this. You are a prudent investor because you've been talking about researching this company for how long now? Like a couple months it's been on your radar? And it is a really good business because it does fly under the radar because people think it's just a hardware company.

It's just a hardware company when the explosive growth on the SaaS business and that really, really high retention rate are all the makings of a really, really good software business. So that is good. One on my radar, which is, you know, always, you know, continues to be one of my favorite stocks out there is Autodesk. They made a really, really successful transition from the licensing model to the software as a service in the cloud. It took a couple years for them to figure that model out, but now that it has happened, we're seeing really, really nice acceleration on the top line, really high margins, and it is a monopoly. I'll even throw another one at you. I am

a monopoly. I'll even throw another one out at you. I am looking more and more into Match Group, obviously the holding company of Tinder, Hinge, Match.com, and a plethora of other dating apps. I found it very interesting on their latest call and their latest investor presentation, their success in monetization and conversion rates to paying customers, because I think that's always been their problem, is they have this massive, massive user base, probably the largest user base of a company that's less than $100 billion in market cap, I would think.

And they're seeing an increase in conversion rate to paying customers and the monetization of, of their users. I'm very interested because I think this is one that has not only lots of room to grow, but is going to be accelerating both revenue and net net income from here. Can I put you on this? Yeah,

go for it. Are you single right now? Depends who's no i'm just kidding i uh i'm not i'm not okay yeah i was like oh yeah i was gonna ask if you're using tinder right now i mean i've used it in the past and is there anything competing yeah there's there's there's like yeah there's there's bumble And then the big one that most of my age group is using is called Hinge, which is explosive growth right now, and it's owned by Match. So the biggest up-and-comer, and this is kind of why I really like Match, is the biggest up-and-comer is also one of their products. So it's really hard to not like it from here. I mean, this is just kind of the way of the future, whether people

like it or not. I know it's weird, but it is what it is. And I think revenue, monetizable users, margins and net income are going to be accelerating from here. Well, that does it this week, guys. Thank you so much for listening. As always, getstockmarket.com. Another administrative note, stratosphere2.com, the 10-day beta test happened, and I just gave you guys all the URLs. So if you want to go, you can sign up for 10 days free of cost. The tools available are really, really powerful. I'm really happy with it.

I'm really proud of it. So stratosphere2.com is the temporary domain. You guys can go on there. No credit card required. It's completely free for the next 10 days. And join the beta test. You can send me a message. It's not perfect.

I have things to fix. But you guys will be pretty surprised at how powerful it is and how good the tools are. There's a stock screener. You can look up financial statements on a 10 year basis ratios, insider information, a plethora of information for every single ticker in the world, not just Canadian stocks. We got every ticker listed. Damn cool, Simon. After this, I got to send you the link. You got to look. I put it online last night.

It's pretty damn cool and very, very powerful. So I'm excited for what you guys can make of it. I mean, anything you want in terms of research, in terms of making a decision, this is going to be the gateway for investors. And I'm really, really happy with it i don't know if you were waiting for me you looked at me like i let's keep that let's keep that i like that i just stared at you in the in the skype, and that was interesting.

No, it's – You were drinking water. All jokes apart, it's definitely a cool site. He showed it to me, the functionality. So I'm excited to try it on my own and just kind of navigate around, see how it looks. I know you put a lot of work into that. A couple hours. A couple hours, yeah, for sure.

All right, guys, we will see you guys next week. Thank you for listening bye-bye the canadian investor is not to be taken as investment advice braden or simone may own securities mentioned on this podcast always make sure to do your own research and due diligence before making investment decisions