Tandia: 4.50% for a 5-year GIC | Page 2 | GIC discussions | Discussion forum

When I retired in the early 2000's Bell was paying 10% on 30 yr bonds. I regret not buying every day 🙂

If we look after BCE distributed its Nortel shares in May 2000, BCE shares closed Thu, June 1, 2000 at $34.70.

The annual dividend then was $1.20. Yield on cost was $1.20 / $34.70 = 3.5% per annum.

Annual dividend is now $3.68. Yield on the cost is now $3.68 / $34.70 = 10.61%.

BCE shares closed yesterday at $68.82 for a 98% capital gain.

Norman1 said
If we look after BCE distributed its Nortel shares in May 2000, BCE shares closed Thu, June 1, 2000 at $34.70.

The annual dividend then was $1.20. Yield on cost was $1.20 / $34.70 = 3.5% per annum.

Annual dividend is now $3.68. Yield on the cost is now $3.68 / $34.70 = 10.61%.

BCE shares closed yesterday at $68.82 for a 98% capital gain.  

And if you look at Cad banks, its prob much much juicier too !

The morale of the story is GIC is only one form of savings, you sacrifice a higher return in exchange for piece of mind. Blue chip equities is a better form of "savings", you take some risk, but you get rewarded !

One cant just want the best without sacrificing anything else. Its called risk / reward, you dont play you dont win !

I still remember President Reagan's investment advice.

1/3 in equities
1/3 in real estate
1/3 in fixed income, and
1/3 in cash

AllanB said
Great discussion on wealth generated for BCE shareholders. All the more reason to tax capital gains at 100% not 50 and get rid of the dividend tax credit. The alternative is to stop subsidizing markets with low interest rates.  

Taxing capital gains at 50% is to encourage people to invest in businesses that provide employment and create wealth.

The dividend tax credit is call "integration". To minimize the effect of taxing the same income twice, once at the corporate level and again when that same taxed income is distributed to the shareholders.

TommyT said

Basically its all based on a real estate crash in Ontario. EQ bank would be the first to go followed by the credit unions. What Buffett does with Home Capital I don't know. I'm just saying with 100 percent certainty EQ bank would be the first to fail.  

I'll bite.
TommyT, can you tell us why you believe EQ Bank will be the first to fail?
What do you define as a real estate 'crash'? that would precipitate this.

"So, conclusion is, they can tax dividends and capital gains differently if they want to."

Governments basically have unlimited taxing powers. They can also introduce a wealth tax, a home equity tax and re-introduce an estate tax.

Hopefully no politicians are reading this stuff, lots of ideas for new gov't revenue streams! (Here's another one: NYC residents pay a 3rd, municipal income tax, on top of the federal and state income taxes, along with all their other taxes.)

Withdrawn.