What action is an advisor likely to recommend to Henry, given his financial situation?

The recommendation to cash in $30,000 of Canada Savings Bonds (CSBs) and pay off the bank loan, followed by borrowing an additional $30,000 to invest in a conservative balanced fund, is a strategic approach that balances debt management with investment growth potential.

By suggesting that Henry pay off the bank loan with the CSBs, the advisor aims to eliminate high-interest debt, which is often a more significant financial burden over time than the interest earned from low-yielding savings bonds. This action reduces risk and monthly financial obligations, freeing up cash flow for Henry.

The next part of the recommendation involves borrowing $30,000 to invest in a conservative balanced fund. This is a prudent step as it allows Henry to potentially earn a higher return on his investment compared to what he would receive from the CSBs while taking on a calculated level of risk associated with a conservative balanced fund. Such funds typically include a mix of stocks and bonds, offering the potential for growth while also providing some level of stability, which can be particularly advantageous in uncertain economic conditions.

Overall, this recommendation reflects a comprehensive financial planning strategy that promotes financial health by managing debt, while simultaneously positioning Henry’s capital for growth. This dual approach is often favored in financial planning to create