Investment Accounts

GICs

A deposit instrument most commonly available from trust companies or banks requiring a minimum investment at a predetermined rate of interest for a stated term, i.e. one year, five years, etc. Generally non-redeemable and non-transferable prior to maturity, but there can be exceptions.

Money Market

That part of the capital market in which short-term financial obligations are bought and sold. These include federal government treasury bills, short term Government of Canada bonds, commercial paper, bankers' acceptances and guaranteed investment certificates. Longer term securities, when their term shortens to three years, are also traded in the money market.

Government of Canada Securities/Bonds

Financial instrument issued by the Government of Canada. These bonds are usually rated a AAA and have a high level of safety. These bonds pay interest usually semi-annually.

Provincial Bonds

Bonds issued by provincial governments. They are rated anywhere from A to AA. These usually yield higher than Government of Canada Bonds.

Corporate Bonds

A bond issued by a corporation. Such bonds are taxable, have a term to maturity, and have a variety of ratings determined by the amount of risk one is assuming when purchasing the bond. They are usually rated from a AA and lower.

Mutual Funds

These are open-end funds that are not listed for trading on a stock exchange and are issued by companies, which use their capital to invest in other companies. Mutual funds sell their own new shares to investors and buy back their old shares upon redemption. There are annual fees that accompany mutual funds and investors should be aware of these fees and how they affect returns.

Income Trusts

An income trust is an equity vehicle that is designed to deliver cash flow from operations to unitholders in a tax-efficient manner. Income trusts are created to invest in securities of an operating business. One can purchase oil and gas, real-estate, ongoing business, and pipelines. Investors can also purchase a basket of trusts called a trust fund.

Equities

The stock, or ownership of shareholders in a company. One can purchase stocks listed on various exchanges such as the Toronto Stock Exchange or the New York Stock Exchange.