Investment Terminology Flashcards
Asset Allocation
Asset allocation involves dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash.
cash/cash equivalent, equities, fixed income
Cash/Cash Equivalents:
Cash: Physical currency or its equivalent.
Equities (Stocks):
Investors become shareholders, with ownership rights and potential dividends.
Fixed Income (Bonds):
Involves lending money to an entity.
Investors receive regular interest payments and repayment of principal at maturity.
Personal Tolerance for Risk
Simply put, risk tolerance is the level of risk an investor is willing to take.
Evaluate Sources of income advice
Financial advisors: These professionals can provide personalized advice on managing and increasing income based on an individual’s financial goals, risk tolerance, and investment experience.
Expanding vs Recession
Expansion is the normal state of the economy; most recessions are brief.
Bull
a bull refers to a market participant who expects the price of an asset, currency, or commodity to rise.
Bear
A bear is an investor who believes that a particular security, or the broader market is headed downward and may attempt to profit from a decline in stock prices.
Stock Exchange
A stock exchange is a centralised location where the shares of publicly traded companies are bought and sold.
Can, US, & International Markets
International market is defined as a set of business activities designed to deliver company’s goods and services in more than one country for making a profit.
Stock Quotes
A stock quote is the price of a stock as quoted on an exchange.
Debt Securities -
Corporate bonds, provincial bonds, Canada Savings Bonds, Debentures, treasury bills, guaranteed investment certificates
Fixed income Securities
Safety, Income, Return of Principal
Components of a BOND
Maturity date, principal/face value, interest rate
Bond Yields
When to buy bonds, when to sell
Bond Quotes
A bond quote provides the current price at which a bond is traded in the market.
