Rates, risk and reward points: BUSINESS WEEK WRAP

January’s volatile markets have Canadians afraid to stay invested and the U.S. Fed slowing its approach to raising rates. In her weekly roundup of business news, Jacqueline Hansen explains why and gets you thinking about how to pass your reward points to your heirs.
January’s volatile markets have Canadians afraid to stay invested and the U.S. Fed slowing its approach to raising rates 2:20

Markets were stabilizing at the end of the week, after a January that knocked six per cent off the value of U.S. stocks and took Canadian stocks to a two-year low.

Canadians have been understandably hesitant to remain invested in such volatile markets.

In fact, they've moved about $75 billion in extra cash out of stocks and bonds, according to a CIBC report.

And while that may seem the safe choice, it's not the most effective, CIBC deputy chief economist Benjamin Tal told CBC this week.  

Tal argues investors have taken out their money when prices are low and risk missing a sharp runup in stock prices that could follow the current turmoil.

"Basically, we go to cash when we should be invested. Because what happens is you go to cash and you miss the recovery," he said.

Fed's wary approach to rates

While individual investors are hoarding their cash, the U.S. Federal Reserve is also casting a wary eye on wild global markets.

On Wednesday, it announced that it would not raise its key interest rate again, after raising it in December.

And it signalled a patient and gradual approach to raising rates for the remainder of the year.

With the Bank of Japan's surprising move to negative interest rates on Friday, that cautious approach looks prudent.

But it doesn't mean mortgage rates won't rise, both in Canada and the U.S., says Craig Fehr, investment strategist for Edward Jones.

As home buyers ponder whether to lock in now or hope for continued low rates, another financial quandary.

Reward points and your heirs

If you collect reward points, will they be of any use to your family after you die?

Reporter Aaron Saltzman this week investigated the curious case of a woman who died leaving 250,000 Aeroplan points.

Aeroplan wanted to charge $2,530 to transfer those points to her husband.

Aeroplan has presented the family with some other options, and its rewards program at least offers the ability to pass points to an heir. Some rewards programs wipe them out when you die, Saltzman found.

Other stuff

Those were just a few of our more popular stories this week. Check out our landing page for more, and don't forget to follow us on Twitter here

In the meantime, here's a day by day of our best stories of the past seven days.