Resources with economic value, especially those that can be converted to cash; i.e. real estate, automobiles, investments (stocks and bonds), materials, inventories, etc.

Asset Class

An investment category; i.e. equities (stocks), fixed income (bonds), or money market (cash). Asset classes can be divided into size (small, mid and large capitalization stocks), geographic location (international, emerging markets, etc.), and other (real estate, commodities, hedge funds, etc.).

Bear or Bull Market

A bear market is a prolonged market period where investment prices fall, usually accompanied by widespread pessimism, as a result of economic recession, high unemployment, or rising inflation (the Depression and Tech Bust of 2000 are examples). A bull market is a prolonged period where investment prices rise faster than their historical average, as a result of economic recovery, boom, or investor psychology; these terms are most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies, and commodities, i.e. Tech Boom of the late 1990’s.


A debt security issued for a period longer than one year by corporations, governments, or their agencies, with the intent of raising capital by borrowing; a bond is the promise to repay the principal along with interest on a specified date; some bonds do not pay interest, but all bonds require a repayment of principal.

Capital Gain

The amount that an asset’s selling price exceeds its initial purchase price; a realized capital gain is an investment that has been sold at a profit, while an unrealized capital gain is an investment that has not been sold yet, but would result in a profit if it was to be sold.

Capital Loss

A decrease in the value of an investment or asset from the initial purchase price; opposite of Capital Gain. A realized capital loss is an investment that has been sold at a loss, while an unrealized capital loss is an investment that has not been sold yet, but would result in a loss if it was to be sold.


Spreading money among several investment options or asset classes for the purpose of reducing company and industry risk in a portfolio; combining a variety of investments (stocks, bonds, real estate), which are unlikely to all move in the same direction at the same time or at the same rate; reduces both upside and downside potential and allows for more consistent performance under a wide range of economic conditions.


A taxable payment paid to a company’s shareholders out of the current or retained earnings, usually quarterly; usually paid by companies that have progressed beyond their growth phase and no longer sufficiently benefit by reinvesting their profits.


Types of securities that represent ownership in a corporation and represent a claim on a proportionate share of the corporation’s assets and profits, i.e. stocks.

Fixed Income

A security that pays a specific interest rate, i.e. bonds, preferred stock.


A numerical measure of price movement in financial markets; a barometer for a given market or industry and benchmarks against which financial or economic performance is measured, i.e. the S&P TSX Composite Index or S&P 500 Index.


An overall general increase in the price of goods and services resulting in a decrease in your ability to buy as much for the same amount of money and a fall in the value of the dollar; measured by the Consumer Price Index (CPI).


A financial product or other asset or item of value acquired for the purpose and expectation of increasing its value through growth (increase in price) or income (dividends or interest) with favourable future returns.


The ability of an investment to be easily converted into cash with little-to no loss of capital, no price discount, and a minimum of delay.


An investor’s collection of investment holdings, usually with reference to its composition; these often include stocks, bonds, and funds.


The amount of money earned or lost from an investment in a particular period, usually expressed as a percentage of the total amount invested.


The measurable likelihood of loss or less-than-expected returns.


A type of security that indicates ownership (equity) in a corporation and represents a claim on the proportional share in the company’s profits and assets; ownership of a company is determined by the number of shares a person owns divided by the number of outstanding shares; many stocks also include voting rights, which allow shareholders to participate in corporate decisions.

Time Horizon

The length of time an amount of money is expected to be invested.

Total Return

The amount of interest and gain or loss (selling price minus cost) earned on an investment over a given time period.


The extent of fluctuation in share price, interest rates, etc.; the higher the volatility (price of stock moving up and down rapidly over short time periods), the less certain an investor is of return; therefore, volatility is one measure of risk.

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