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See International Financial Reporting Standard
An informal account set up to hold assets for a beneficiary. A trustee manages the assets until the beneficiary reaches legal age. The person who sets up the trust can be the trustee or can appoint someone else. You can close the trust if you want to.
See Operating Statement.
A charge you pay based on your total income from all sources. The Canadian government and your province set the rate.
An investment that holds assets that pay income to investors. An income trust often pays out income monthly, but there is no guarantee.
A benchmark or yardstick that lets you measure the performance of a stock market, part of a stock market or a single investment. Examples: S&P/TSX, S&P/TSX Canadian Bond Index.
Index bonds keep pace with inflation. If the Consumer Price Index (CPI) goes up, so does the interest rate on your bond. On the other hand, because index bonds are longer-term bonds, interest rates can affect their value more than other bonds.
A fund that invests in investments that track a specified target index or benchmark. For example, an index fund may track the S&P/TSX Composite Index. Also called an Exchange Traded Fund (ETF).
This means investing in a group of stocks that behave like a particular market index. You can make your own picks, or simply buy units of an index mutual fund or index ETF.
An annuity that pays less at the start, but raises your income each year. Helps you keep up with rising prices over many years. Example: An annuity with 3% indexing will pay about 21% less than a similar non-indexed annuity at first. After about 7 years, your income will be higher and keep going up.
A GIC that bases what you make in part on a stock market index. When the stock market is doing well, you make more. But if the stock market does badly, you will not lose money. You will get the stated interest rate.
A way to invest that is based on choosing investments that track or mirror a stock market index. Your goal is to get the same return as the index.
Individual pension plan (IPP)
A retirement savings plan that allows bigger tax-deductible contributions than an RRSP. It is designed for people with higher incomes. It works like a defined benefit plan and must follow Canada's pension plan rules.
An RESP that you open for a single child or other beneficiary. The beneficiary does not have to be related to you by blood. You choose when and how much you want to contribute.
A rise in the cost of goods and services over a set period of time. This means a dollar can buy fewer goods over time. In most cases, inflation is measured by the Consumer Price Index.
The risk of a loss in your purchasing power because the value of your investments does not keep up with inflation.
Property, money, titles, or debts that pass to you after someone's death.
Initial public offering (IPO)
The first sale of shares that a company offers to the general public. Also called a Primary Distribution.
Initial sales charge (ISC)
See Front-end Load.
Every director/senior officer of a reporting issuer; every director/senior officer of a company that is an insider or subsidiary of a reporting issuer; any person/company who owns or controls more than 10% of the voting securities of a reporting issuer.
Institutional and high net worth series (Series I)
Series I mutual funds have high minimum investment requirements and are typically aimed at institutional investors (such as pension plans) or investors making large investments in the fund. Funds in these series generally have lower management fees than the retail series of the same fund.
See Insurance agent.
A person who is trained and licensed to give expert advice and sell insurance. Some get extra training so that they can also sell investments. They get paid by the companies whose products they sell.
See Insurance agent.
A company that sells insurance products. Some companies sell only life insurance. Some sell only property insurance. Others sell all types of insurance.
A written contract for insurance. It describes how long you are covered, what you are covered for, any part that you have to pay (the deductible) and what you will pay for the insurance (your premium).
The amount you will pay regularly to receive insurance.
A fee you pay to borrow money. Or, a fee you get to lend it. Often shown as an annual percentage rate, like 5%. Examples: If you get a loan, you pay interest. If you buy a GIC, the bank pays you interest. It uses your money until you need it back.
Interest rate risk
Interest rate risk applies to debt investments such as bonds. It is the risk of losing money because of a change in the interest rate.
International Financial Reporting Standards
A set of international generally accepted accounting principles (GAAP).
When a person dies without a legal will. The probate court then decides what will happen to their money, property and other assets.
An inverse ETF allows investors to “short” an index. It’s called “inverse” because it profits when the index declines (and vice versa). Inverse ETFs can be risky for investors who hold them for too long – they are designed for day-to-day use and investors should monitor their performance daily.
To use money for the purpose of making more money by making an investment. Often involves risk.
An item of value you buy to get income or to grow in value.
A securities firm that buys and sells a wide range of investments. They are likely a member of the Investment Industry Regulatory Organization of Canada (IIROC).
Investment Funds Institute of Canada (IFIC)
An association of the mutual fund industry. Its role is to serve its member firms, work together with regulatory bodies, and protect the interests of mutual fund investors.
How long you expect to hold onto your investment. Based on when you believe you will need your money back. In most cases, the shorter the horizon, the less risk you will want to take with your money.
Investment Industry Regulatory Organization of Canada (IIROC)
National self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.
Investment policy statement (IPS)
An investment policy statement (IPS) outlines the rules you want your advisor to follow for your portfolio. These rules can help you avoid making decisions based on your emotions - in good or bad times. An IPS does not provide a complete detailed financial plan, but it does provide guidance that ensures your plan stays on track over the long term.
See Dealing representative.
An organization that offers securities for sale to investors. Examples: corporations, investment trusts and government bodies.