Glossary

Bonds Expand/Collapse

A certificate which is evidence of a debt on which the issuer promises to pay the holder a specified amount of interest for a specified length of time, and to repay the loan on its maturity. Strictly speaking, assets are pledged as security for the loan, except in the case of government bonds, but the term is often loosely used to describe any debt issue. Bonds are issued by corporations and by federal, provincial and municipal governments. Bond holders are first in line before shareholders to claim any of a company's assets in the event of liquidation.

Corporate Bonds & Debentures Expand/Collapse

Companies sell bonds when they want to borrow money to grow and expand. They promise to pay the lender's money back on a future maturity date and pay interest in the meantime. There are different kinds of corporate bonds. Some are secured by specific assets which you can seize if the company fails to pay interest or return the original principal amount when the bonds mature. Others that aren't secured are called debentures. They are merely a promise to pay you. Corporate bonds often also have added features. You might be allowed to convert your bonds into the company's stock, or the company might have the right to buy back the bonds before they mature.

Guaranteed Investment Certificates (GICs) Expand/Collapse

A deposit instrument most commonly available from trust companies or financial institutions 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.

Mutual Funds Expand/Collapse

Mutual funds are investment strategies that allow you to pool your money together with other investors to purchase a collection of stocks, bonds, or other securities that might be difficult to recreate on your own.  An Advisor will help you to choose mutual funds that meet your investment time horizon and your overall financial goals. 

Strip Bonds and Strip Coupons Expand/Collapse

Usually high quality federal or provincial government bonds originally issued in bearer form, where some or all of the interest coupons have been detached. The bond principal and any remaining coupons trade separately from the strip of detached coupons, both at substantial discounts from face value.

Treasury Bills Expand/Collapse

Short-term government debt, usually issued in trading units of $250,000 and sold chiefly to large institutional investors. Treasury bills do not pay interest but are sold at a discount and mature at par (100). The difference between the purchase price and par at maturity represents the purchaser's income in lieu of interest. In Canada such gain is taxed as interest income in the purchaser's hands.

Equities Expand/Collapse

The stock, or ownership of shares in a company.

Mutual funds and other securities are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc. The information contained in this webpage is provided as a general source of information, it was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete.

 

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