Discovering the best investments in Canada isn’t just about choosing the right assets or predicting market trends. It’s about making your money work smarter, where every dollar invested is a strategic step to achieving your financial goals.
In this guide, we’ve compiled a list of the best investment options that maximize returns and allow your hard-earned capital to thrive and grow.
- Investing is a way to grow your money and meet your financial goals.
- Investors have different goals, risk tolerances, and time horizons, so the best investment will differ for each.
- Investment products such as stocks and index funds may provide high-growth potential but may also have higher volatility in asset valuations. Other products like bonds and high-interest savings accounts offer stable returns but with minimal growth in value.
- Amur Capital offers mortgage investment funds, which can suit investors who value capital preservation, stable income, and high growth.
Things to consider that dictate how to invest
Before investing your hard-earned money, consider crafting an investment plan. It details where and how to use your capital to meet your financial goals. Personal finance is personal, so your investment plan will be unique. However, all investment plan involves the same three components:
- Investment goals – Like a compass needle pointing true north, setting clear investment goals will provide structure and purpose to the money you allocate. Whether buying your first home or retiring early, make sure each goal is Specific, Measurable, Attainable, Relevant, and Time-bound (SMART).
- Time horizon – The duration for remaining invested will depend mainly on your goal. Generally, the longer you invest, the more powerful the impact of compounding on your investment. This means having a more significant growth potential for your investments and having room to spare for any market downturns.
- Risk tolerance – Risk in investing can mean a caution for loss or an opportunity for significant gains, which is why your comfort level with the fluctuations of your investment value is crucial.
What are the best investments in Canada?
As an investor, your primary goal is to make as much money as possible while minimizing risk. This singular goal is where the differences between each investor’s risk tolerance, financial situation, time horizon, and investment goals matter. Some may want the highest returns despite higher volatility, while some settle for stable returns but with more security.
Source: Amur Capital. For illustrative purposes only. Return targets differ in how volatile the investment is. Generally, increased return potential go hand-in-hand with increased volatility.
While past performance does not guarantee future results, a consistent annual return over an extended period can indicate resiliency during market downturns. Here are some of the best investments according to their rate of investment returns:
If you want the highest possible returns with more volatility, stocks may be for you. Stocks represent ownership in a company or business. As the business or company grows, so does the share value, which investors can sell for a profit or receive dividends from. However, the opposite is also true.
For example, the stock prices of the “Magnificent Seven” tech companies—Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia— have soared after the intense developments in artificial intelligence (AI) in 2023. However, they were battered the year before due to high-interest rates and fears of a looming recession.
Due to the high volatility of stocks, investing in them for the long term is more favoured, as it is not unusual for stock prices to drop drastically in value by 10% or more over a short period.
• Exchange-traded funds (ETFs) and mutual funds
If you want the same exposure to the stock market but with less exposure to volatility, then ETFs and mutual funds may be for you.
ETFs and mutual funds are pooled investments comprising stocks, bonds, and other funds, providing a single diversified investment. The difference between the two lies in how they are traded: ETFs are sold throughout the day like stocks, while mutual funds are traded only once daily.
Since both funds provide the same exposure to the market as stocks, they are suited for an investor with a long-term horizon.
• Government and Corporate Bonds
Bonds may suit you if you want security but value predictable growth in your investments.
Bonds are loans with interest issued by companies or governments for a period. On the date of maturity, or when the bond becomes due, the issuer is supposed to pay back the face value of the bond in full, including the interest.
Government bonds have significantly low risk since the government backs them. In exchange for this security, however, government bonds may provide lower returns than corporate bonds, which hinge on the credit rating and performance of the company.
• Real Estate
Real estate investments traditionally involve either owning residential properties and reselling them for profit or renting out condominiums and office buildings. Generally, real estate investments offer a hedge against inflation as home values and rents account for it. However, traditional investing in real estate may require a more active approach, in terms of managing rental properties, flipping units, and renovating projects.
A way to passively invest in real estate is through Real Estate Investment Trusts (REITs). With REITs, investors pool their money to purchase income-generating properties, which are then managed by a trustee corporation.
Another passive approach to real estate is mortgage investing, specifically through Mortgage Investment Corporations (MICs). Both REITs and MICs are managed investments, but the key difference is where the investors’ funds are allocated. Unlike REITs, which invest in physical properties, MICs invest the capital in a pool of highly diversified mortgages.
What are the best safe investments with high returns in Canada?
For investors who want steady returns with the least volatility, consider the following options:
• High-interest savings accounts
High-interest savings accounts offer higher interest rates (around 1 to 2 percent) than traditional ones. Most Canadian banks offer these products, with deposited funds insured by the Canada Deposit Insurance Corporation (CDIC) for up to $100,000 per account.
While a high-interest savings account is considered one of the safest investments around, you can quickly lose the purchasing power of your money due to inflation if rates are too low.
• Guaranteed investment certificates (GICs)
A Guaranteed Investment Certificate acts as a special deposit that allows investors to get the original amount deposited at the end of the term, plus an agreed-upon interest. Interest can be paid monthly, at maturity, or at any frequency agreed upon. Since they are also insured by the Canada Deposit Insurance Corporation (CDIC) up to $100,000, GICs are considered low-risk investments.
A popular way to utilize GICs is called laddering. This means buying multiple GICs with different maturity dates, and when one of the GICs matures, reinvest that into a new GIC, ensuring continuous access to funds at each maturity or additional capital to reinvest.
• Government of Canada treasury bills
Government of Canada treasury bills (or T-Bills) are guaranteed by the federal government. Most Canadian banks offer T-bills, which can be held in registered and non-registered accounts.
Investors buy T-bills at a discounted rate to par value (or face value) and redeem them at face value upon maturity. The difference between the purchase and redemption amount is the yield.
One thing to note is that T-bills depend on the Bank of Canada’s overnight interest rate, so they are sensitive to monetary policy changes. However, since they offer a guaranteed return on the initial investment, they are still safer than most.
• Mortgage Funds
If you want alternative, specialized investments that go beyond the stock market and provide both capital preservation and room for high growth— mortgage funds may be for you.
Simply put, a mortgage investment fund is a type of investment product for mortgage-backed securities. With a mortgage fund, investors will not be affected by the traditional stock market risks. They can gain exposure to the Canadian real estate market without having to buy or manage a property.
It works like this: investors provide their money to a Mortgage Investment Corporation (MIC), which is invested in a pool of highly diversified mortgages. The MIC then earns its income from the mortgage interest and fees paid by borrowers, and a part of the income is passed on to investors as dividends. v
Amur Capital simplifies the process of mortgage investing by handling the administrative work needed and reducing risk through a diversified and secured pool of mortgages. Its offerings cover a variety of risk tolerances and growth strategies— from conservative to high-growth— to provide investors with stable historical returns even during market downturns.
For example, Amur Capital Income Fund (ACIF) has provided Canadian investors with a steady income stream since 1984. In fact, ACIF’s average rate of return in the past 5 years is 9.57%. In contrast, the rate of return of the S&P/TSX Composite Index for the same period is 7.77%.
How to get started investing in 2024
Now that we have outlined how to create an investment plan, listed some of the best and safest ways to invest your money, and explored different investment options based on risk and rewards, it’s time to take the proper steps in your investing journey this 2024:
- Start with a budget
Determine how much money you can comfortably invest without compromising your day-to-day needs. It is recommended that you build up an emergency fund (amounting to 3 to 6 months of your salary) or minimize high-interest debts (like credit cards) before investing.
- Leverage tax-advantaged accounts
Take advantage of tax-sheltered accounts like the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) to maximize your investment strategy.
TFSA and RRSP are registered investment accounts created by the federal government that not only hold your investments but also grow your investment gains tax-free while they stay in these accounts. However, note that these accounts will have contribution limits, and they may not be open to some types of investments.
In contrast, non-registered accounts offer more flexibility with uncapped contribution limits and are open to all asset classes. But depending on the type of investments they hold, your investment gains may be taxed differently.
- Choose an investment type
There are many ways to navigate the financial market, from traditional fixed-income securities like bonds and ETFs, to alternative investments like mortgage funds. While choosing your investments may seem daunting at first, remember to consider those that best fit your overall financial goals, risk tolerance, and time horizon.
As you learn more about investing, you’ll soon be able to identify which types can fit these three and be able to diversify your portfolio to allow both security and high growth in your investments.
- Start with small yet regular contributions:
Time is one of the most critical factors in investing, as it allows compounding to work its magic. Start investing with what you have but remain committed to your investment plan and resist the urge to predict short-time market fluctuations.
- Monitor and adjust:
Having a clear view of your goals is essential, as your financial situation and market conditions can change over the years. Is everything on target in terms of returns? Regularly review your investment portfolio to ensure it aligns with your goals.
Start investing with Amur Capital
With access to multiple funds that can earn a consistent return, limited exposure to market volatility unlike bonds and stocks, and fit for various risk tolerances, Amur Capital provides a simpler approach to investing, offering a stable and ideal long-term investment vehicle for investors.
Frequently Asked Questions
Cryptocurrencies are known to have the highest return, but remember that the returns are never guaranteed. Additionally, investing in digital currency is more like gambling; they are highly volatile and tend only to favour a few fortunate people. Amur Capital offers a high-yield mortgage fund that provides a more stable income outside digital currency.
It depends on your investment goals, time horizon and risk appetite. You can explore government bonds, GICs, or mortgage investing.
Again, your choice should depend on your time horizon, risk capacity, and financial goals. You can also contact an investment advisor to help you understand your options.
An excellent way to invest in real estate is through Amur Capital’s mortgage investment funds. Instead of buying property and relying on rental income, you can generate revenue from the mortgage interest.
If you’re investing through a mortgage investment corporation, you can invest any time.
If you want more stable real estate investments, consider contacting Amur Capital and investing in mortgages. We have a long track record of stable returns, regardless of the economic conditions.
The best investment looks different for every investor. However, consider investing in Amur Capital’s mortgage investment funds. Amur Capital has had stable returns for years, which has given many investors peace of mind through economic changes.