Guaranteed Investment Certificates (GICs), are a common savings vehicle used by Canadians. There are different types. Some are locked in for a specific period of time, while others are cashable at anytime.
GICs provide the following advantages:
-Your principal is guaranteed.
-For most GIC types, you are guaranteed a fixed rate of interest for a specific period of time.
-They help people to save who would otherwise spend their money. If their money is locked away, they have no way of accessing it, making it impossible to spend it on a whim.
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Dollar cost averaging is what you are doing when you contribute to your investments on a periodic basis such as monthly or biweekly, rather than putting down a one-time lump sum. The advantage to dollar cost averaging is that you don’t have to worry about “timing the market”. Instead, you buy units or shares when the market price is both high and low. Over time, this results in a lower average unit price then if you made a lump sum contribution.