Investing in stocks or bonds?

Investing in stocks or bonds?

Your advisor is telling you to invest in stocks and bonds, but you don’t understand the difference between the two or the impact this decision will have on your portfolio.  Stocks and bonds 101 coming up.

What are stocks?

Stocks or shares are securities that represent a portion of capital of a publicly traded company. By purchasing stocks, you become a shareholder and you own a portion of this company.

What are bonds?

Bonds are debt securities issued by a company, a government or a municipality for a specific term at a predetermined interest rate.

Therefore, when you buy bonds, you’re lending money to the issuer and at the end of the contract, you get back the amount invested plus interest.

It’s all about risk and return

Stocks are investments that fluctuate (up or down) depending on supply and demand. The risk is higher, but so is the return potential.

Bonds on the other hand generally have a lower return, but are less risky.

Rule of thumb: the riskier the investment, the higher the return potential.

And in general, the opposite is true as well: the safer the investment, the lower the return potential.

Type of investment  Risk  Return potential  Objective
Stocks High High Give your portfolio growth potential, especially in the long term.
Bonds Average Average Provide stability to the portfolio and an attractive return.

The solution for better diversification

The easiest and most profitable way to diversify these different types of investments is in a portfolio fund.

In doing so, you won’t be putting all your eggs in one basket and you’ll distribute your savings better between stocks and bonds.

With this turnkey solution, you have the option of investing in a number of funds tailored to your risk tolerance and your savings goals.

These funds are managed by reputable fund managers who carefully choose the investments, companies, terms and other criteria to give you the best return possible.

Peace of mind at SSQ

Did you know that the amount you invest in SSQ portfolio funds is guaranteed? Yes, your capital is guaranteed at 75% in the event of death or the annuitant’s 100th birthday.

For an additional charge, you can guarantee your capital at 100%.

Something to help you sleep more soundly and worry-free!

Investing in portfolio funds

If you want to invest in a portfolio fund, a meeting with your advisor is essential.

The advisor will assess your needs and determine what your investor profile is (as well as your risk tolerance).

Talk to your advisor about your savings goals so they can help you choose the fund that’s right for you.

Note: This blog post is provided for information purposes only. It is not a substitute for professional legal, financial or fiscal advice. For advice specific to your personal situation, always speak with your advisor. SSQ cannot be held responsible for any decision made as a result of reading this blog post.