Terminology
Key investing terms explained simply.
Adjusted Cost Base
The tax cost of an investment used to calculate capital gains or losses.
Asset Allocation
How your portfolio is split between stocks, bonds, cash, and other assets.
Bear Market
A market decline of roughly 20% or more from recent highs.
Bid-Ask Spread
The difference between the price buyers offer and sellers ask for.
Bond
A loan to a government or company that usually pays interest.
Capital Gain
Profit made when you sell an investment for more than you paid.
Compound Growth
Growth earned on both your original money and previous gains.
Diversification
Spreading money across different investments to reduce concentration risk.
Dividend
A cash payment from a company or fund to investors.
ETF
An exchange-traded fund that holds a basket of investments and trades like a stock.
Expense Ratio
The annual cost of owning a fund, similar to MER.
Fixed Income
Investments like bonds or GICs that focus on interest payments and stability.
GIC
A guaranteed investment certificate with fixed returns over a set term.
Index Fund
A fund designed to track a market index instead of trying to beat it.
Interest
Money earned from lending or depositing cash.
Liquidity
How easily an investment can be sold or converted to cash.
Management Fee
The fee paid to manage an investment fund.
MER
Management Expense Ratio. The total yearly cost of owning a fund.
Mutual Fund
A pooled investment fund that holds many securities.
Portfolio
All of your investments combined.
Principal
The original amount of money invested or borrowed.
Rebalancing
Adjusting your portfolio back to your target mix.
Risk Tolerance
How much investment volatility or loss you can handle.
Stock
Ownership in a company.
Taxable Account
A non-registered account where investment income may be taxed.
Total Return
Investment growth including price gains, dividends, and interest.
Volatility
How much an investment's price moves up and down.
Yield
Income from an investment as a percentage of its price or value.