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Originally posted by ride_spinna
i have a question for ppl that are pretty experience dealing with stocks and the market
i have some money saved up in GICs right now earning around 3% interest
i know some stocks that have dividend yields of 4% to 4.5%. If the stock is a relatively "safe" company such as a bank, wouldnt putting my GIC money into that stock earn me more interest and better yet, in the long term if the stock price goes up, i make some money from selling the stock?
i'm aware that i get taxed on the dividend payment but still, wouldnt i better off with the stock rather than GICs?
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Yes, but the stock price could also go down, which puts your initial capital at risk. If the dividend yield is 1-2% higher than the interest rate of your GIC, does that compensate you for the risk of the stock price going down?