Capital Gains

When a stock is sold for a profit, it’s the difference between the net sales price of securities and their net cost, or original basis. If a stock is sold below net cost the difference is a capital loss.…

Closed-end Investment Fund

An investment trust that issues a fixed number of securities that trade on a stock exchange or in the over-the-counter market. Assets of a closed-end fund are professionally managed in accordance with the fund’s investment objective and policies and may …

Commission

The fee charged by an investment advisor or broker for buying or selling securities as an agent on behalf of a client.…

Convertible Bonds

A bond that may be exchanged by the owner, usually for common stock of the same company.…

Derivatives

Investments that derive their value from the price of another investment or from anticipated movements in interest rates, currency exchange rates or market indexes.…

Dividends

A dividend is a portion of a company’s profit paid to preferred and common shareholders. A stock selling for $20 a share with an annual dividend of $1 a share yields the investor 5%.…

Equities

Investments that have no guarantee of safety of capital but are a potential for generation of capital gains which can account for 10% to 80% of a balanced portfolio. Examples include common shares, derivatives, convertible bonds, preferred shares and equity …

Fixed Income

Investments that have some safety of principal and a potential for capital gains that typically account for 15% to 70% of a balanced portfolio. Examples include bonds and GICs with maturities greater than one-year, strip bonds, mortgage-backed securities, private placements …

Investment Trust

A investment trust that usually generates cash flows from one business or operating company, unlike an investment fund, which generates income from a diversified pool or portfolio. The trust holds debt and equity interests of an operating business. Businesses that …

Liquidity Risk

Liquidity is a measure of how quickly an investment can be sold for cash at a fair market price. If a fund can’t sell an investment quickly, it may lose money or make a lower profit, especially if it has …