A

Account
It is an arrangement with a financial institution, which you can set up for depositing and withdrawing, earning interest, borrowing, investing, etc.

Accumulated Value
It refers to how much your money’s worth after it earns interest or experiences capital growth, includes the amount you started with, plus any increase.

Adjusted Cost Base
Also called average adjusted cost, adjusted cost base tells you the average price you paid for your investments, including commissions or fees.

Administrative Body
An administrative body is a formal group that creates rules and regulations and uses special tribunals or courts to enforce them.

Annual Growth
It refers to how much money or an investment grows in a year.

Annual Information Form
It is a source of additional information not included in a company’s prospectus or annual financial statements, required by law and must be given to you free of charge if you request.

Annual Report
It is a detailed report published by a company for shareholders at the end of each fiscal year, which includes financial statements and management’s discussion and analysis. It may also include information on significant company events and the company’s future outlook.

Annuity
An annuity is a contract you buy from an insurance company, usually for your retirement which provides regular payments to you, often monthly. How much you get depends on a number of things: (1) the interest rate at the time you purchase the annuity, the higher the rate, the better the annuity payment; (2) the type of annuity, it costs more to buy an annuity that provides you income for life, or continue payments to your spouse after you die; (3) your age when the annuity begins, the younger your age, the more payments you’ll likely received and they’ll be lower to cover the difference.

Appreciation
It refers to how much your money, investments or other assets go up in value as time passes.

Arbitration
It is a less costly way to settle a legal dispute than going to civil court. It puts your case in front of an impartial arbitrator. You must accept the decision as final. Arbitration is available to all clients of firms that belong to an investment dealers association.

Ask
It is the lowest price at which anyone is willing to sell a stock.

Asset Allocation
It is a way to understand and manage your investment better by dividing your portfolio into different kinds of assets. Examples are cash, stocks, bonds, and real estate.

Assets
It refers to what a company or an individual owns or controls. Examples are buildings, equipment, property, a car or cash. It can also include intangible assets, such as patents and trademarks.

Auditor
It is a firm of chartered accountants hired to give an independent opinion on the company’s financial statements.

Auditor’s Report
In an annual report, the auditor’s opinion on the company’s financial data and supporting evidence.

Automatic Rebalancing
With your permission, an investment company can regularly calculate the foreign limit within your registered plan and automatically sell your foreign investments in order to keep you below the limit and avoid tax penalties.

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B

Back-End Load
It is a sales commission sometimes charged when you sell an investment, such as mutual fund or annuity, also called a deferred sales charge. It discourages early withdrawals: the longer you hold a back-end load fund, the lower the percentage fee will be. It may let you withdraw up to 10% of your investment per year free of charge. For example, a typical load might start at 5.5% if you sell your fund after one year. That number drops to 0% if you sell after eight years. Note, however, how a back-end load is calculated can have a big impact on what you make on your investment. If your investment went up in value, you’ll keep more if the fee is based on what you originally invested, not what your investment is worth when you sell.

Balance Sheet
A balance sheet is a snapshot of a company’s financial health at a specific point in time. It sets out a company’s assets, liabilities and shareholder’s equity on a given date. It is also known as a statement of financial position.

Balance Funds
Balanced funds invest in a ‘balanced’ portfolio of equities, debt securities and money market instruments with the objective of providing reasonable returns with low to moderate risk.

Bank
A financial organisation authorised by government to do specific things with its customers’ money. Services include personal or commercial bank accounts, credit cards, lines of credit and loans, investments, certified cheques, bank drafts and cashier cheques, and foreign exchange.

Barter
It is an exchange of goods and services without the use of money.

Bear Market
It refers to a weak market where stock prices fall and investor confidence fades. It usually occurs when an economy is in recession and unemployment is high, with rising inflation.

Beneficiary
The person(s), institution, trustee or estate you choose to receive money, property or other benefits when you die. You may name beneficiaries in your will, insurance policy, retirement plan, annuity, trust or other contracts.

Bid
Refers to the highest price at which anyone is willing to buy a stock.

Blue Chip Stocks
It refers to stocks of leading companies with a solid record of healthy dividend payments, good management, superior products/services and other strong investment qualities.

Board Lot
It is a standard amount of shares for trading, usually 100 shares set by stock exchanges.

Bonds
It is a kind of loan you make to the government or a company to help them finance their operations. In return, you are paid a specified rate of interest, plus a set dollar amount (called the face value of the bond) at a specific date in the future (the maturity date). It is usually backed by a pledge of specific assets and may be sold at prices higher or lower than their face value.

Book Value
Refers to what you paid when you bought each investment, including any commissions or fees.

Budget
It is a plan for spending and saving based on your income and expenses.

Bull Market
Refers to a strong market where stock prices rise and investor confidence grows usually tied to economic recovery or an economic boom, as well as investor optimism.

Buying on Margin
It is where you borrow money to invest usually done using a margin account at a registered investment dealer subject to strict regulation due to the level of risk involved.

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C

Capital
To investors, it is the total they’ve invested in securities, their homes and other assets, plus cash. To an economist, it’s the machinery, factories and inventory required to produce products.

Capital Gain
Refers to the profit you get when you sell an asset, like an investment, for more than you paid for.

Capital Loss
When the sale price of an asset is lower than its purchase price, you have a capital loss.

Capital Markets
It is when people trade debt or equity securities.

Cash (Cash Equivalents)
Refers to currency or assets you can change easily into currency. Examples are treasury bills, corporate bonds, and notes.

Cash a Cheque
It means to convert a cheque into money, which you can either deposit it into an account or exchange it in return for cash.

Cash Flow Statement
It is a summary of the flow of cash in and out of a company over a set period of time.

Cheque
It is a piece of paper that tells the bank to pay a specific person or company a specific amount of money.

Civil Court
It is a court that resolves more complex disputes involving bigger claims; requires a lawyer.

Closed-End Investment Funds
They are similar to mutual funds, but they do not issue or redeem units or shares on an ongoing basis. They only issue a certain number of units or shares and often list them on a stock exchange for trading among investors.

Collectables
These are items thought to increase in value over time due to their rarity or desirability. Examples are artwork, antiques, and coins. As an investment, they carry the risk that their value will not increase.

Commission
Refers to what a broker or agent is paid for services, such as buying or selling securities or real estate.

 Common Shares
When you buy common shares of a company, you become a part owner of the company. It usually means you have the right to: elect directors and to vote on certain major corporate decisions; share in the company’s success through dividends and/or capital appreciation; share in any residual assets of the company if it is wound up.

Compound Growth
It is when you are being paid interest on the amount of money you first invested and on the interest you are paid. Each year the amount of money you will be paid interest on gets larger (interest on interest).

Contract
It is a binding written or verbal agreement that can be enforced by law.

Coupon
It refers to the part of a bond that you give to your bank to collect the promised interest payments, which can be cashed on or after the due date.

CPI (Consumer Price Index)
A yardstick that measures the change in consumer prices based on a monthly statistical survey. It is also called the cost-of-living index, indicating the rate of inflation.

Credit Card
It is a card that allows you to buy on credit, with no cash down. Credit cards are available from banks, savings and loans, retail stores, and other businesses if you qualify. The card issuer pays the purchase price for you; you must repay them within a certain time to avoid an often hefty interest fee.

Credit Union
A credit union is a non-profit financial institution owned and operated entirely by its members. Members can borrow money at low interest rates and make deposits. Sometimes large companies and organisations set up credit unions for their members or employees.

Currency
It refers to money, including coins and paper notes.

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D

Debentures
It refers to a debt, similar to a bond, where no specific asset backs the loan; usually backed only by the integrity of the company borrowing your money. It is sometimes backed by a general “floating charge” on the issuer’s assets.

Debit Card
It is a card that allows you to access your bank account electronically often with fees.

Debt
It refers to borrowed money that must be repaid with interest by a set date.

Deferred Profit Sharing Plan
It is a plan set up by employers, usually to build a retirement fund for employees. Funding is based on a share of the company’s profits.

Deferred Sales Charge
Also referred to as “back-end load” a deferred sales charge is a sales commission sometimes charged when you sell an investment, such as a mutual fund or annuity. It discourages early withdrawals; the longer you hold a back-end load fund, the lower the percentage fee will be. It may let you withdraw up to 10% of your investment per year free-of-charge.

Deflation
It refers to a drop in the cost of goods and services over time usually caused by a shrinking supply of money or credit, or reduced spending by consumers or government. It boosts purchasing power of the dollar.

Depreciate
It the decrease in value of an asset over time due to wear and tear or obsolescence usually calculated for accounting or tax purposes.

Derivatives
It refers to a special kind of financial instrument. Its value is based on the characteristics and value of some other asset, including commodities, bonds, equities or currency. Examples are futures and options, usually for advanced investors only due to the high level of risk.

Discount
It is when something sells for less than its normal price.

Diversification
It is a way to reduce risk by spreading your money across different investments. You can diversify by type of security (e.g. stocks, bonds, real estate), by company or industry, or by geographies.

Dividend
It is part of a company’s profits paid to its shareholders set by the company’s Board of Directors, usually paid in cash and taxable. For common shares, amount varies with the company. It may be skipped if business is poor or the directors choose to invest in things like new equipment or buildings.

Dividend Reinvestment Plan
Usually you buy investments with the cash you have in your account. You can also arrange to use any dividends you make to buy more shares of stock or units of mutual funds. This is called dividend reinvestment. When you buy this way, you usually save money on fees. Note that this is not available for all stocks. It is available for any mutual fund that generates dividends.

Dividend Stocks
Dividend stocks provide regular income in the form of a dividend, which is a portion of the company’s profits paid to its investors.

Dollar-Cost Averaging
It is a strategy where you try to reduce the cost of buying securities by spreading your purchases out over time. How it works: you buy fixed amounts of a security, such as a mutual fund, at regular intervals, regardless of price. You buy less when the price is high, but more when the price is low – averaging out your cost.

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E

Earnings
It is the net income a company makes during a specific time period based on revenue minus cost of sales, operating expenses and taxes. Often affects a company’s stock price; healthier earnings usually mean a company is doing well. New companies may have lower earnings while they get started on their growth path.

Earnings (Loss) Per Share
It refers to a company’s total earnings divided by the number of shares sold to the public; also used to compare performance of companies.

Endorse (a Cheque)
Endorsing a cheque is done by signing the back of a cheque, which proves you are the person to whom the cheque was written.

Equities
Another word for stocks, it represents a share in the ownership of a company, which gives you a claim to a share in the company’s assets and profits.

Exchange Traded Fund
It is a fund that is based on a specific market index or sector, but trades on the stock exchange like any company share. Unlike regular open-end mutual funds, it can be bought and sold at any point in the trading day. It is not actively managed (they track an index), so their management expense ratios tend to be lower than most mutual funds.

Expected Return
It refers to the estimated value of your investment down the road, which tells you the overall profit you might expect – either as income (interest or dividends), or as capital gains (or losses) usually expressed as a percentage.

Expenditures
It is a payment or the promise of future payment.

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F

Financial Institution
A company that collects money from the public to put in stocks, bonds, money market instruments, bank deposits, loans, etc.

Fiscal Year
It refers to any 12 month period that a company uses for accounting purposes, which doesn’t have to start on January 1.

Fixed Income Funds
Fixed income funds invest in debt securities like bonds, debentures, and mortgages that pay regular interest, or in corporate preferred shares that pay regular dividends. The goal, typically, is to provide investors a regular income stream with low risk. Fund values will go up and down to some extent, particularly in response to changes in prevailing interest rates.

Flow-Through Shares
It refers to shares issued by a mining, oil or gas company to finance exploration work, often the main source of financing for junior mining companies. Benefit includes a major tax break, with a deduction as high as 131.25% of your initial cost.

Foreign Content Limit
It is the maximum value of foreign investments that can be held in registered plans, described as a percent of the total value. A penalty is applied for each month you exceed the foreign content limit.

Front-End Load
It refers to the sales charge you pay when you buy an investment such as a mutual fund or annuity, which covers administrative costs, transaction fees, etc. When you buy a fund with a front-end load, you pay a percentage fee that is immediately taken out of the amount you invest and paid to the distributor. Front-end loads can be negotiated with your adviser or dealer.

Fund Return
It is the number you estimate your mutual fund will earn as a percentage of your investment in a year, minus the management fees and other costs. To estimate what a typical return might be, look at how well the fund has done over various time period in the past. Remember, past performance is no guarantee of how a fund will do in the future. It is important to be realistic. Even though your fund may have had a 50% return one year, that return is unlikely to be a sustainable over the long term. On a compound annual basis, equity funds had average returns of 5.5% over the last ten years.

Futures Contracts
It is an agreement where the seller promises to deliver a specified amount of an asset at a specified price at a future date. Buyer and seller both trying to forecast what it will be worth when the sale closes; one side wins, the other loses. Futures that trade on an exchange offer standardised terms. A clearing agency settles the transactions.

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G

Generally Accepted Accounting Principles (GAAP)
It is a set of rules and guidelines for reporting financial information. Each country may have its own GAAP.

Global and Foreign Funds
Global and foreign funds may be fixed income, growth or balanced funds that invest in foreign securities. These funds can offer investors international diversification and exposure to foreign companies, but are subject to risks associated with investing in foreign countries and foreign currencies.

Growth or Equity Funds
Growth or equity funds invest primarily in common shares (equities) of local or foreign companies, but may hold other assets as well. The goal is typically long-term growth because the value of the assets held increases over time. Some growth funds focus on large ‘blue-chip’ companies, while others invest in smaller and riskier companies. Performance will be affected by the success or failure of specific investments and by the performance of the stock markets generally.

Growth Rate
It refers to the change in a company’s revenues, earnings, dividends, etc., from year to year usually expressed as a percentage.

Growth Rate Per Year
It is the annual growth in percent of the value of the investment after all market return and fees are taken into consideration.

Guaranteed Investment Certificates
It is a deposit certificate you purchase from a financial institution. Most pay a specified rate of interest for a specified length of time. Some base payment on the performance of a benchmark such as a stock exchange index.

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H

High Yield Bonds
High yield bonds usually pay the kind of higher return you would expect from equities, but with the lower risk you’d expect from fixed income products. But buyers beware – the overall rating of risk is higher than other types of bonds or sometimes they are not rated at all.

I

Income Statement
It refers to the revenue and expenses of a company over a set period of time; also known as an earnings report, statement of earnings, statement of operations and statement of profit and loss.

Index Funds
Index funds invest in a portfolio of securities selected to represent a specified target index or benchmark.

Inflation
It is an increase in the cost of goods and services over a period of time that decreases the purchasing power of the dollar usually measured by the consumer price index.

Initial Sales Charge
Also referred to as “front-end load” it is a sales charge you pay when you buy an investment such as a mutual fund or annuity that covers administrative costs, transaction fees, and so forth. When you buy a fund with a front-end load, you pay a percentage fee that is immediately taken out of the amount you invest and paid to the distributor. Front-end loads can be negotiated with your adviser.

Insider
It refers to every director or senior officer of a reporting issuer, and every director or senior officer of a company that is itself an insider or subsidiary of a reporting issuer. Any person or company who beneficially owns or exercises control over more than 10 percent of the voting securities of a reporting issuer is also an insider.

Interest
It is a fee paid to a lender to borrow its money or a penalty charged for late payments usually shown as an annual percentage rate.

Invest
To lay out money for the purpose of making more money, usually involves risk.

Investment
It is an item of value purchased to generate income or to grow in value.

Investment Dealer
It is a securities firm usually a member of an investment dealers association. It provides full service for a fee and deals in a wide range of products (e.g. stocks, bonds, mutual funds, options).

Investment Horizon
It refers to how long you expect to hold onto your investment based on when you believe you will need your money back. Usually the shorter the investment horizon, the less risk you want to take with your money.

Invoice
It is a bill you receive from someone who has provided products and/or services to you and lists the goods and services they gave you and shows what you owe.

IPO (Initial Public Offering)
It refers to the first sale of shares by a company to the general public; also called primary distribution.

Issuer
It is an organisation that offers securities for sale to investors. Examples are corporations, investment trusts, and government bodies.

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L

Large-Cap Stocks
Large-cap stock is company shares generally issued by a company whose total stock is worth over $5 billion on the stock market. Cap is short for capitalization, which is often used as a measurement of a company. Usually large-cap stocks pay more in dividends than stock from smaller or mid-sised companies.

Liability
A liability is debt that must be paid off. Examples are loans, mortgages, long-term debts, and accounts payable.

Limited Partnership Units
Limited partnership units represent interests in a partnership. The partnership usually invests in a specific industry (such as real estate or oil and gas). Often provides tax benefits to members, the limited partners who invest in the partnership usually benefit from limited liability.

Liquidity
Liquidity has to do with how easy it is to turn investments quickly to cash, without a major penalty. Some investments, such as mutual funds, let you cash out on short notice. With others, it depends on how easy it is to find a buyer on the open market. Note that law or the contract terms may stop you from reselling some securities for months or even years.

Load
When you buy or sell a mutual fund, you may have to pay a sales fee, also called a load. You can pay the load upfront, when you buy a fund (a front-end load) or when you sell (a back-end load).

Lost Profit Potential
When you invest in a mutual fund, you’re choosing to pay some fees in the hope that an expert fund manager will help you make more than you could on your own. But what if you had invested the money that went to pay fees? Lost profit potential tries to measure the possible gains you’ve given up (also called foregone earnings).

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M

Management Expense Ratio
One way of telling how much a mutual fund is costing you each year is to look at how high the management and administrative fees are, compared to the amount of the investment. This number is called the MER. It’s written as a percentage of what the fund is worth. The MER comes off the top each year, no matter whether the fund grows a little or a lot, or even loses money. The “management fee” is the biggest part of the MER. It pays for things like the mutual fund company’s investment management, marketing and administrative costs. Each fund also pays its own operating costs such as brokerage fees it pays for buying and selling investments, audit fees and communications to its investors. In addition, a part of the MER covers “trailer” fees. Trailer fees are paid to sales people monthly or quarterly for giving investment advice and other services to clients. The size of the trailer fee differs from one fund to the next and between fund companies. Make sure you ask your salesperson what the trailer fees are that he or she will earn on your mutual fund purchase, or look up the fee schedule in the fund’s prospectus. Make sure you get great service for the money you’re paying. You can use a fund’s MER to compare the cost of investing in it as opposed to another fund. You can also see if your fund’s MER is higher or lower than the MERs of other funds with similar investment styles and objectives. MERs for all funds, and averages for the various fund types, are regularly published in some newspapers. Remember, a fund that invests in international markets is likely to have higher management costs and therefore a higher MER than a fund that invests locally. And a fund that invests in equities is likely to have a higher MER than a fund that invests in bonds due to higher management costs. Also, the same fund with a back-end load fund will probably charge a higher MER than if it had a front-end load.

Margin Account
It is an account you open to buy securities using money borrowed from an investment dealer. Limits apply to why you can borrow. Not available from companies registered solely as mutual fund dealers.

Margin Call
It is when you have to add money to your margin account to cover a percentage of what you’ve borrowed. Keeps what you owe within proper limits to protect the investment dealer’s loan.

Market Index
It is a measure of price changes in a securities market based on the performance of selected stocks, bonds and commodities.

Market Price
It is the amount you would have paid on the statement date to buy one unit or one share of the investment. So if you have 100 units and the market price is $2, the value of your investment on the statement date is 2 x 100 or $200.

Market Return
Market return tells you how much a fund actually grew over a year, before the fund company deducts management and other fees.

Market Value
It is the value of each investment on the statement date. The market value tells you what you would have made if you sold your investment on that day.

Material Change
It refers to any information about the company that would have a significant effect on a stock's price once it becomes known to the public. Examples are takeover, management changes, and new products.

Maximum Loan Value
The most a dealer can lend you through your margin account based on a set percentage of your margin investment.

Minting: Mint
It refers to making a coin by stamping metal; a place where money is coined.

Money Management
Money management involves planning how to protect and make wise use of your money including budgeting, saving, and investing.

Money Market Funds
Money market funds invest in short-term (less than one year to maturity) corporate and government debt securities such as treasury bills, bankers acceptances and corporate notes. Some money market funds specialize in money market instruments or invest only in treasury bills. These are generally very low-risk funds offering low returns.

Mutual Fund
It is an investment that pools money from many individuals and invests it in a mix of securities including stocks, bonds and other securities that meet the fund's investment objectives, managed by a professional money manager. Shares or units can be redeemed on demand.

Mutual Fund Dealer
It refers to a person who buys and sells the shares or units of mutual funds.

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N

Net Asset Value
It is what a single mutual fund share is worth in dollars based on the value of the assets of the fund, less the fees, expenses and taxes, divided by the number of units in the fund.

Net Return Per Year
Net return per year tells you how much you made on your mutual fund in a year, after the company takes off any loads and fees. It may be quite different from what you expected the fund would earn (fund return), depending on the load and how long you’ve been investing.

Net Worth
It refers to the difference between an individual's or a company's assets and liabilities, which is also used to define wealth.

No Load
A term that means there is no sales commission when you buy or sell the shares or units of a mutual fund.

Notes to Financial Statements
It is a part of a company's interim or annual financial statements that provides important added information explaining significant or unusual events affecting the business.

O

Offering Memorandum
It is a document that describes the business and affairs of an issuer designed to help potential buyers make an investment decision when they are considering exempt-market securities.

Options
It refers to securities that give the holder the right to buy assets (a “call” option) or sell assets (a “put” option) at a specific price for a specific period of time traded on security exchanges.

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P

P/E Ratio (Price to Earnings Ratio)
It is the value of the company’s shares divided by the number of shares used to compare different companies, or compare a company’s past and present performance. A high P/E usually means high earnings in the future.

Penny Stock
They are low-priced stocks that typically sell for less than one dollar per share usually offered by companies with good growth prospects but limited assets and a short operating history.

Pooled Fund
Investment vehicles in which institutional, sophisticated, and high net worth investors contribute funds that are invested and managed by an investment manager. Pooled funds are used to reduce trading costs and can look very much like mutual funds but they can use different investment techniques (e.g. hedge funds), invest in different things (e.g. real estate), and they have lower fees and expenses.

Portfolio
All the investments an individual or organisation holds including stocks, bonds, and mutual funds.

Preferred Shares
It gives special rights to shareholders including the right to: receive a fixed dividend from a company before any dividend goes to common shareholders; receive a portion of the selected assets of the company if it stops doing business; redeem shares at specific times or convert into common shares at a predetermined price. These shares do not give shareholders any voting rights.

Present Value
It refers to value today of money you will receive in the future calculated by reducing the future amount at an appropriate compound interest rate.

Primary Market
It is where a new security is offered to investors for the first time. For example, buying a company’s stocks from a company it hires to sell them for it (underwriter).

Pro Forma Earnings
An informal way to show investors how certain changes in a company may affect its results; shows results “as if” the change had happened at the beginning of the reporting period.

Pro Forma Financial Statements
It helps investors understand the effect of an actual or possible change in a company, shows what would have happened to company results if the change had taken place at the beginning of the reporting period. Statements must be prepared and included in a prospectus whenever a company acquires a new business.

Profit
It refers to a financial gain based on the money left over after you subtract expenses from income.

Profit After Fees
Profit after fees is what you make on a mutual fund investment after you’ve paid the fund fees and other charges.

Profit Before Fees
Profit before fees is the amount your investment makes before you pay any fund fees and other charges.

Prospectus
A legal document that sets out the full, true and plain facts you need to know about a security. It contains information about the company or mutual fund selling the security, management, the company’s products, financial and strategic planning, and risk.

Prospectus Exemption
It refers to specific conditions under which securities may be lawfully sold without complying with the requirements for a prospectus.

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R

Redemption Fee
A fee charged when you sell or transfer an investment, such as a mutual fund deducted from your investment, intended to discourage early withdrawals.

Registrants
It refers to investment firms and their employees registered with the Securities Archive centre . Firms must register before they can legally provide investment services.

Reporting Issuer
A company that has issued voting shares or sells shares on any recognised stock exchange. Firms must file a prospectus for the securities and obtain a receipt from the Securities Archive centre .

Restricted Voting Shares
Like common shares, but no (or restricted) voting privileges.

Retained Earnings
The total profits of a company equal to annual earnings minus all expenses and dividends. It is sometimes reinvested in the business to drive future growth.

Return on Investment
It is the profit or loss an investment makes in a year expressed as a percentage of the original amount invested. For example, 10% return = $10 profit on a $100 investment.

Revenue
It is a company’s total annual sales, including discounts and returned merchandise.

Reverse Mortgage
A reverse mortgage lets you free up cash from your home to live on. You take a mortgage on your home to buy investments that will give you income. When you die and the house is sold, your estate pays back what you borrowed plus the accumulated interest.

Rights
It is when a company gives its shareholders first dibs on buying more shares before offering them to the general public. Issued at a specified price within a specified period of time in proportion to the number of shares each shareholder already owns.

Risk
The degree of uncertainty about what you’ll get back from an investment. Higher risk means more chance of losses. Examples are futures, options, and some equities. Lower risk means less chance that you will lose any of your initial investment. Examples are government treasury bills.

Risk Tolerance
It is your comfort level with accepting possible losses from your investments.

Royalty Trusts
Investments related to energy products, usually fossil and synthetic fuels.

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S

Savings
It is the part of your income that you don’t spend; the difference between your earnings and expenses.

Savings Account
A bank account intended for depositing funds. It pays interest and lets you withdraw cash any time.

Savings Bonds
Savings bonds are issued in a number of forms and backed by federal and some provincial governments usually sold at regular times each year. Purchase limits often apply.

Secondary Market
It is where you buy a security from another investor, not the company that issued the stocks usually handled through a stock exchange.

Segregated Funds
It is a special type of insurance contract with profits based on the performance of a pool of an insurance company’s assets. These assets are ‘segregated’ or kept apart from other assets of the company. Unlike most mutual funds, offers a limited guarantee that protects part (75-100%) of the original investment.

Self-Regulatory organisation
It is a non-government organisation responsible for regulating standards of practice and business conduct of its own members that adopts and enforces rules of conduct for fair, ethical and efficient practices to protect investors’ interests.

Share Certificate
It is a document that represents a shareholder’s part ownership of a corporation.

Small Claims Court
It handles relatively minor claims for compensation and damages, no lawyer required.

Small-Cap
A term for companies where the total value of all their shares is small. Typically describes newer businesses often fast growing and usually more volatile.

Specialty Funds
Specialty funds may invest primarily in a specific geographical area (e.g. Asia) or a specific industry (e.g. high technology companies).

Stale Dated
These are cheques older than six months, which are usually no longer valid.

Stock
It is an investment that gives you part ownership or shares in a company often providing voting rights in certain corporate decisions.

Stock Market
It is where companies that need capital do business with those who have money to invest in their companies. It refers to organised trading of stocks, usually through exchanges.

Strip Bonds
These are bonds with interest payments separated – leaving only the principal to buy, usually at a cheaper price because you don’t receive the interest. It entitles you to the value of the bond when its term ends, but no annual interest payments. Examples are some federal or state government bonds.

Symbol
This is the symbol for the investment when it is traded on a stock exchange. All stock traded on stock exchanges have a stock ticker symbol. You can enter that symbol on the exchange websites to get an up-to-date stock price. Mutual fund symbols start with some letters, and are followed by three or four numbers. You can use the symbol to search for information on that fund from the mutual fund company’s Website. There are also Websites that collect mutual fund information.

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T

Taxes
A fee the government charges on income and sales used to finance government programs and expenses.

Ticker
It is an electronic record of current or recent trading activity on an exchange (used to be printed on paper).

Tip
It refers to the sharing of important information about a company not known to the general public.

Trade
It is the sale of a security from a buyer to a seller.

Treasury Bill
It is a short-term government debt (less than one year to maturity) that does not pay interest. Instead, usually sold for less than what its full value will be when its terms ends. Issued regularly by government and usually sold in large denominations.

Trust Company
A company that holds monies deposited into it on behalf of individuals or businesses.

Trust Units
It is a way to represent the interests of each member of a trust. Assets usually include property (real estate investment trusts), royalties from oil and gas production (royalty trusts) or business income (income trusts). Many offer tax advantages to investors.

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V

Vesting
It is your right to keep your pension benefits even if you leave the plan – either in cash today or income when you retire. Certain conditions usually apply, including the type of plan, when the money went into your pension and how long you’ve been a plan member.

W

Warrants
It gives the holder the right to buy shares in a company at a specified price – usually above the current price – for a specified time. They are typically offered at the time of a new issue of bonds, preferred shares or common shares.

Y

Yield
It refers to yearly return on an investment usually expressed as percentage.

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