Saving Definitions Flashcards
Bond
Debt instruments where an investor loans money to an entity in exchange for interest payments
Mutual fund
Pooled funds managed by professionals, invested into various assets
Stock
Shares of ownership in a company
Equity
Investments where you own an asset that has the potential to generate income or appreciate in value over time
ETF
Exchange-traded funds
Funds traded on stock exchanges that track an index, sector, commodity, or other assets
Indexes
A statistical measure that tracks the performance of a specific group of stocks, bonds, or other investments
Capital gains
A profit from an investment
Liquidity
The ability of an investment to be converted into cash quickly and without loss of value
Term deposit
Let you invest for a set amount of time for a fixed interest rate
Fixed income
Investments where you lend money to an entity in exchange for regular interest payments and repayment of the principal
Time horizon
When you need the money from an investment
Market (bond and stock)
A system where companies and investors engage to raise capital and share profits
Investment profile
A snapshot of your current financial situation. It’s a profile of your risk tolerance and investment goals
Portfolios
A collection of financial investments
TFSA
Tax-free savings account
RRSP
Registered retirement savings plan
Conservative
To be focused on reducing risk
Investment risk
The chance that the value of an investment will decrease
Volatility (investment)
The amount and frequency a stock price increases and decreases
Diversification
Investment strategy that involves spreading your money across different asset classes, industries, or regions to reduce risk
Asset class
A group of investments with similar characteristics and behaviour in the market
Active investment strategy
Buying investments when they believe the value will increase and selling it when the value is about to decrease (buy low, sell high)
Passive investment strategy
Buying investments and holding onto them for a long period of time so the value will gradually increase
ROI
Return on investment
Measures the gain or loss made on an investment relative to the amount of money invested
Commodities
Physical assets that may increase in value
Simple interest
Amount of interest earned on an investment based on the original amount and the simple interest rate
Compound interest
Interest that uses the principal and any previously earned interest
