We have warned continuously about the dangers of retirees and near retirees being invested in the equity market either directly or through mutual funds. In 2007 we advised all our segregated funds holders to move to the sidelines with their retirement savings and go into bonds for safety or into a life annuity for incomes.
Moshe Milevsky who co wrote “Pensionize Your Nest Egg” is correct is saying that dramatic or drastic action should be avoided as a result of the wild stock market action over the last 2 weeks or so But you need to be careful about what products you choose in which to invest.
The interest from GIC’s is fully taxable, so if there is any inflation, you are possibly losing money because of the low interest rates. Index linked GIC’s are probably not much better, especially of the fund is linked to a stock market index. And this situation I don’t see improving as, if the US Federal Reserve doesn’t raise interest rates over the next 2 years, how can we?
If you have decided on getting a guaranteed income so that you don’t have to worry about losing your retirement savings, you should look to a government bond fund or annuities. If you lose your retirement savings in the market, to whom will you turn?
For these reasons, you should not spread your risks as these are the only 2 products which can offer you some measure of security. If you don’t have some sort of guaranteed, really guaranteed income from your retirement savings, what have you got?