ABCDEFGHIJKLMNOPQRSTUVWXYZ
A
Asset Allocation:
The process of dividing investments among different kinds of asset categories, such as stocks, bonds, real estate, and cash, to optimize the risk/reward balance based on an individual’s goals and risk tolerance.
B
Bond:
A fixed income instrument representing a loan made by an investor to a borrower, typically corporate or governmental. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations.
C
Capital Gains:
The profit realized from the sale of securities or other investments. In Canada, 50% of capital gains are taxable.
D
Dividend:
A portion of a company’s earnings distributed to shareholders. Dividends can be issued as cash payments, shares of stock, or other property.
E
ETF (Exchange-Traded Fund):
A type of investment fund and exchange-traded product, meaning they are traded on stock exchanges. ETFs hold assets such as stocks, commodities, or bonds and generally operate with an arbitrage mechanism designed to keep trading close to its net asset value.
Estate Planning:
The preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes.
F
Financial Advisor:
A professional who provides financial services and advice to clients. Financial advisors can provide many different services, such as investment management, tax planning, and estate planning.
G
GIC (Guaranteed Investment Certificate):
A Canadian investment that offers a guaranteed rate of return over a fixed period of time. GICs are considered safe investments and are often used by conservative investors.
H
No Entry
I
Inflation:
The rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.
J
No Entry
K
No Entry
L
Liability
A company's legal financial debts or obligations that arise during the course of business operations. Liabilities are settled over time through the transfer of economic benefits, including money, goods, or services.
M
Mutual Fund:
An investment vehicle that pools money from many investors to purchase securities. Mutual funds are managed by professional money managers who allocate the fund's assets to produce capital gains or income for the investors.
Marital Deduction
A tax provision that allows a spouse to transfer assets to their surviving spouse at death without incurring estate taxes. This applies under certain rules when transferring assets to a surviving spouse or common-law partner, allowing for tax deferral until the surviving spouse passes away or disposes of the assets.
N
No Entry
O
No Entry
P
Pension Plan:
A retirement plan that requires an employer to make contributions to a pool of funds set aside for an employee's future benefit. The pool of funds is invested on the employee's behalf, and the earnings on the investments generate income to the employee upon retirement.
Portfolio:
A range of investments held by an individual or institution. A portfolio may contain various assets including stocks, bonds, mutual funds, ETFs, and other securities.
Q
No Entry
R
RESP (Registered Education Savings Plan):
A tax-deferred savings plan intended to help families save for their children’s post-secondary education. Contributions to an RESP can grow tax-free until the funds are withdrawn.
RRSP (Registered Retirement Savings Plan):
A retirement savings and investment vehicle for employees and the self-employed in Canada. Contributions are tax-deductible, and investment earnings are tax-sheltered until withdrawal.
Risk Tolerance:
The degree of variability in investment returns that an individual is willing to withstand in their investment portfolio. It is a critical component in investment planning, helping to ensure that the chosen investments align with the investor's financial goals and comfort level with risk.
S
No Entry
T
Tax Planning:
The analysis and arrangement of a person's financial situation in order to maximize tax breaks and minimize tax liabilities in a legal and efficient manner.
TFSA (Tax-Free Savings Account):
A flexible, registered general-purpose savings vehicle that allows Canadians to earn tax-free investment income. Contributions to a TFSA are not tax-deductible, but withdrawals are tax-free.
U
No Entry
V
No Entry
W
Wealth Management:
A professional service that combines various financial services to address the needs of affluent clients. It includes financial planning, investment portfolio management, and other aggregated financial services.
X
No Entry
Y
Yield
The income return on an investment, such as the interest or dividends received from holding a particular security. Yield is usually expressed as an annual percentage rate based on the investment's cost, current market value, or face value.
Z
No Entry