✅  TOP 25 INVESTMENT TERMS

 

1. Annual Limit

The maximum allowable contribution to registered plans for a calendar year, as set by the CRA.

2. Asset Allocation

Dividing your portfolio among different asset classes (e.g., stocks, bonds, cash) to balance risk and return.

3. Beneficiary Designation

Assigning a person to receive funds from your registered or insurance-based account upon your death — often avoids probate.

4. Book Value

The original purchase price or adjusted cost base of an investment, used to calculate gains or losses.

5. Capital Gains

Profits made when you sell an investment for more than you paid. Tax treatment depends on the account type.

6. Contribution Deadline

The final date to make contributions for a particular tax year (e.g., March deadline for RRSPs).

7. Contribution Room

The amount you're eligible to contribute to a registered account without tax penalties. Unused room usually carries forward.

8. Diversification

Spreading investments across sectors or asset classes to reduce overall risk.

9. Estate Bypass

Feature of certain accounts (like Seg Funds or TFSAs with a named beneficiary) that allows assets to pass outside the estate.

10. Fund Maturity Guarantee

A Seg Fund feature that guarantees you’ll receive at least 75–100% of your original investment at maturity.

11. Grant Entitlement (CESG, CDSG)

Government matching contributions for RESP or RDSP, based on your income and contribution level.

12. Management Expense Ratio (MER)

The annual fee charged by a fund for managing your investment, expressed as a percentage of your holdings.

13. Market Value

The current price or value of an investment if sold today.

14. Maturity Date (Seg Funds)

The end of a Seg Fund contract, when the guaranteed or actual market value is paid out.

15. Overcontribution

Contributing more than your available room to a registered account — may trigger penalties.

16. Rebalancing

Adjusting your investment portfolio to return to your original asset mix.

17. Reset Option

A Seg Fund feature that allows you to lock in growth by resetting the guaranteed value.

18. Risk Tolerance

Your ability and willingness to endure investment losses or volatility.

19. Rollovers

Transferring funds from one registered plan to another under specific conditions, often tax-deferred.

20. Tax-Sheltered Growth

Investment growth inside registered accounts is not taxed while the funds remain in the plan.

21. Tax Slip (T4A, T5, RL-1)

Government-issued forms showing income or withdrawals, required for tax filing.

22. Time Horizon

The amount of time you plan to hold investments before needing the money.

23. Volatility

How much an investment’s price moves up and down. Higher volatility means greater potential risk and reward.

24. Weighted Average Cost (WAC)

The average price paid per unit of an investment, adjusted for the quantity of each purchase. It’s used to calculate capital gains or losses when selling.

25. Withdrawal Rules

Each account type has specific conditions, tax implications, or penalties for taking money out.