An investment approach that seeks long-term performance through a buy-and-hold approach. It is opposite to an active portfolio management approach. See also “active management.”
The evaluation of a fund manager’s performance, usually by comparing it against an established market benchmark to determine whether the fund’s returns are acceptable.
A federal privacy law that outlines how businesses must handle personal information in the course of commercial activity.
Statements issued by securities commissions that outline policies or regulations on certain matters. Examples are uniform policies, provincial policies, national policies and national instruments.
A registered retirement savings vehicle available to employees whose employer participates in such a plan; and to self-employed individuals who do not have access to a workplace pension. A PRPP enables its members to benefit from the lower administration costs of participating in a large, pooled pension plan.
The process of proportionately dividing assets within a portfolio across a variety of security types, asset classes or regions, according to a certain set of criteria.
Mutual funds that invest in other mutual funds, rather than buying securities directly.
Information about the investor that is used to determine an appropriate portfolio mix, and thus the portfolio’s expected returns.
The party responsible for building and managing an investment portfolio, according to a particular set of guidelines or investment mandate.
A legal document that gives someone the authority to act for someone else in financial, personal care or legal matters when they are incapable.
Ongoing, regular, automated purchases of investments that recur at a pre-determined frequency.
A preferred class of share that ranks above common share but below debt in the event of insolvency. Preferred shares typically pay predetermined dividends to holders but do not include voting rights, except under special circumstances. Preferred shares pay dividends before common shares. See also “common shares.”
An investment trading above par value. See also “discount.”
A ratio calculated as a company’s current share price divided by earnings per share (EPS). This ratio indicates the price of a security based on its current earnings and anticipated growth prospects.
The amount original amount of a loan or investment at face value, without interest.
The process of verifying the authenticity of a will. Probate fees are based on the value of an estate’s assets and the province or territory where the will is valid.
The financial gain remaining after a company pays all its expenses and taxes. Dividends are paid from profits.
A disclosure document outlining the legal framework of a security . It details the issuer’s financial condition, how funds will be raised and used, the risks associated etc. for potential investors..
The total cost per unit, including acquisition fees, paid by an investor.
The value of money, based on how many goods and services a dollar buys. When it goes down, consumers can obtain fewer goods and services for their money.
A government-based pension plan, almost identical to the Canada Pension Plan (CPP), providing monthly retirement, disability and survivor benefits to workers in the province of Quebec. As with CPP, participation in QPP is mandatory for workers aged 18 and over. See also “Canada Pension Plan (CPP).”
The change in value of a security over a period of time plus cash disbursements such as dividends or interest, divided by the original purchase price. See also “return.”
Financial ratios provide a relative measure of two separate numerical values taken from a company’s financial statements. Analysis of these ratios provides a way to evaluate the overall financial health of a company relative to itself and to other companies. Commonly use ratios include price to earnings, debt to equity, return on equity, etc.).
The market for residential and commercial properties.
The dollar value of all goods and services produced by an economy, adjusted for inflation.
An interest rate adjusted for inflation, measured as the nominal interest rate minus the consumer price index (CPI).
The return on an investment after adjusting for inflation.
A fee to the investor, based on the amount being invested, charged by a mutual fund company when an investor sells units of the funds. It is the opposite of an acquisition fee (which is also called a front-end load). See also “acquisition fee.”
A tax-deferred savings plan to help pay for post-secondary education. Contributions to the plan are not tax deductible, but the federal government pays grants that match 20% of the first $2,500 contributed annually. See also “Canada Education Savings Grant (CESG).”
A savings plan established by employers to provide a pension to employees upon retirement. RPPs are registered with the Canada Revenue Agency and contributions made by both employers and employees are tax-deductible.
A tax-deferred retirement account to which funds accumulated in an RRSP can be moved and gradually withdrawn from as taxable income. There are no maximum withdrawal limits; however, there is a minimum withdrawal requirement each year. Investors may have more than one RRIF and can transfer them from one financial institution to another.
A tax-deferred retirement savings plan allowing investors to contribute a portion of qualifying income and defer tax until funds are withdrawn. Federal rules establish annual contribution limits, and withdrawn funds are taxed as regular income even if they are accrued through interest, capital gains or dividends.
An amount normally paid annually to shareholders by a company.
Entities charged with establishing and enforcing rules related to activities performed by securities market participants to ensure compliance with regulations governing those markets.
Individual, non-institutional investors who buy and sell securities for their own personal accounts, typically in smaller quantities compared with institutional investors.
An entity’s net income that is retained to be used to finance growth, rather than being paid out as dividends to shareholders.
The change in value of a security over a period of time plus cash disbursements such as dividends or interest. See also “rate of return.”
The right of a mutual fund unitholder to withdraw their investment in the fund for a cash amount equal to the net asset value of the units sold. The fund has until settlement — that is, the date the transaction is considered finalized and closed — to pay the investor (typically one to three days).
The chance that the actual return of an investment will differ from the expected return.
A characteristic of investors who prefer low-risk investments and are not comfortable with market volatility.
The risk characteristics of a particular investment.
A person’s ability to tolerate market fluctuations and the changes they bring to the value of their investments. People who can handle risk are considered to be risk tolerant; those who cannot are risk averse.
The rate of return, or potential return, of an investment that takes into account the risk that must be accepted to achieve the return. Risk-adjusted returns are often used to evaluate different investments. For example, consider two investments with the same rate of return. Investment A is higher risk than Investment B. All else being equal, investment B would have the better risk-adjusted return.
