[vc_row][vc_column][vc_video link=”https://vimeo.com/257966329″][vc_btn title=”Watch more Kelly Keehn videos” link=”url:https%3A%2F%2Fcheckfirst.ca%2Fresources%2Fvideos%2F|||”][/vc_column][/vc_row][vc_row equal_height=”yes” content_placement=”middle” css=”.vc_custom_1585586809217{margin-top: 90px !important;margin-bottom: 90px !important;}”][vc_column width=”5/12″][vc_single_image image=”415″ img_size=”large” alignment=”center” style=”vc_box_circle_2″][/vc_column][vc_column width=”7/12″ css=”.vc_custom_1584530166405{padding-left: 55px !important;}”][vc_custom_heading text=”Common investment categories” use_theme_fonts=”yes”][vc_column_text]While there are thousands of different investments to choose from, there are five common categories called “asset classes” in which they are organized. You may find that you prefer only one asset class or a blend of all five in your investment portfolio. Take the time to learn about each class and if they fit your goals and, more importantly, your risk tolerance.[/vc_column_text][/vc_column][/vc_row][vc_row full_width=”stretch_row” css=”.vc_custom_1585586825272{padding-top: 90px !important;padding-bottom: 90px !important;background-color: #f7f6f4 !important;}”][vc_column width=”1/6″ css=”.vc_custom_1585043978756{padding-top: 16px !important;}”][vc_custom_heading text=”1″ font_container=”tag:h2|text_align:center” use_theme_fonts=”yes” el_class=”font-bely number”][/vc_column][vc_column width=”5/6″][vc_custom_heading text=”Cash equivalencies” use_theme_fonts=”yes”][vc_column_text]Cash equivalencies and cash-like investments are generally secure investments that provide you with quick access to your money. Because of the low risk related to these types of investments, they’ll generally have relatively low rates of returns.
Why pick a cash equivalency? They provide security and access. You might choose to keep money in cash because you need it in the short-term to make a purchase, or if you think there’s too much risk in the market. In the long-term, though, cash equivalencies won’t help very much in growing a portfolio.
Risk Level: Very low[/vc_column_text][vc_btn title=”Examples” style=”custom” custom_text=”#c76f58″ size=”lg” i_align=”right” i_icon_fontawesome=”fa fa-angle-down” add_icon=”true” custom_onclick=”true” custom_onclick_code=”toggle_target(‘#sc_1’,this)”][vc_row_inner equal_height=”yes” gap=”15″ el_id=”sc_1″ el_class=”hidden”][vc_column_inner width=”1/3″ css=”.vc_custom_1585049099929{padding-top: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text]Savings bonds
A special bond that the federal and some provincial governments issue with a set rate of interest. As of November 1, 2017, the Government of Canada no longer offers the sale of Canada Savings Bonds (CSBs) or Canada Premium Bonds (CPBs).[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584530636637{padding-top: 20px !important;padding-bottom: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text css=”.vc_custom_1585089758664{margin-bottom: 0px !important;}”]Money market funds
A mutual fund that invests in short-term fixed income debt securities, including commercial paper (representing a short-term loan to a corporation) and treasury bills (T-bills), which is a short-term debt instrument issued by a government. Some specialize in Canadian or U.S. investments, or invest only in T-bills.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584530657292{padding-top: 20px !important;padding-bottom: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text css=”.vc_custom_1585089749555{border-radius: 2px !important;}”]Guaranteed investment certificates (GICs)
An investment that works like a special kind of deposit which pays a set rate of interest for a set length of time. Some GICs base your return on a benchmark, such as a stock exchange index.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row full_width=”stretch_row” css=”.vc_custom_1585586831514{padding-top: 90px !important;padding-bottom: 90px !important;}” el_id=”#section_1″][vc_column width=”1/6″ css=”.vc_custom_1585043999292{padding-top: 16px !important;}”][vc_custom_heading text=”2″ font_container=”tag:h2|text_align:center” use_theme_fonts=”yes” el_class=”font-bely number”][/vc_column][vc_column width=”5/6″][vc_custom_heading text=”Fixed income securities” use_theme_fonts=”yes”][vc_column_text]Fixed income securities are investments based on the straightforward concept of lending and borrowing. When you buy a bond, you are essentially lending your money to the government or a corporate borrower who then pays you a fixed interest rate until eventually paying you back the full “face value” of the bond at the end of the term. Fixed income securities are often less liquid than cash equivalencies.
Why pick a fixed income security? They’re relatively safe and often offer a guarantee and better rates of returns than cash-equivalent investments.
Risk level: Low[/vc_column_text][vc_btn title=”Examples” style=”custom” custom_text=”#c76f58″ size=”lg” i_align=”right” i_icon_fontawesome=”fa fa-angle-down” add_icon=”true” custom_onclick=”true” custom_onclick_code=”toggle_target(‘#sc_2’,this)”][vc_row_inner equal_height=”yes” gap=”15″ el_id=”sc_2″ el_class=”hidden”][vc_column_inner width=”1/3″ css=”.vc_custom_1584530889184{padding-top: 20px !important;background-color: #f7f6f4 !important;border-radius: 5px !important;}”][vc_column_text]Government bonds
A bond issued by a federal, provincial, or municipal government. As of November 1, 2017, the Government of Canada no longer offers the sale of Canada Savings Bonds (CSBs) or Canada Premium Bonds (CPBs).[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584530901420{padding-top: 20px !important;background-color: #f7f6f4 !important;border-radius: 5px !important;}”][vc_column_text]Corporate bonds
A bond issued by a company in order to raise financing for reasons such as ongoing operations, mergers and acquisitions, or to expand its business.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584530912104{padding-top: 20px !important;background-color: #f7f6f4 !important;border-radius: 5px !important;}”][vc_column_text css=”.vc_custom_1585070519740{border-radius: 2px !important;}”]Debentures
A bond-like investment where you lend money to a government or company based only on their reputation; however, unlike a bond, the borrower does not back the loan with any collateral.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row full_width=”stretch_row” css=”.vc_custom_1584115821031{padding-top: 90px !important;padding-bottom: 90px !important;background-color: #f7f6f4 !important;}”][vc_column width=”1/6″ css=”.vc_custom_1585044005102{padding-top: 16px !important;}”][vc_custom_heading text=”3″ font_container=”tag:h2|text_align:center” use_theme_fonts=”yes” el_class=”font-bely number”][/vc_column][vc_column width=”5/6″][vc_custom_heading text=”Equities/Stocks” use_theme_fonts=”yes”][vc_column_text]Equities are most often known as stocks or shares and represent part ownership of a business – sometimes to the extent where you are entitled to vote at shareholder meetings. Returns from equities come in two ways: profits from the business called dividends or by selling shares whose value has grown.
Why pick equities? They carry higher risk but they can help significantly in building your savings.
Risk level: Variable
Short-term hold (0-5 years): Very high
Medium-term hold (5-10 years): High
Long-term hold (10+ years): Medium-high
[/vc_column_text][vc_btn title=”Examples” style=”custom” custom_text=”#c76f58″ size=”lg” i_align=”right” i_icon_fontawesome=”fa fa-angle-down” add_icon=”true” custom_onclick=”true” custom_onclick_code=”toggle_target(‘#sc_3’,this)”][vc_row_inner equal_height=”yes” gap=”15″ el_id=”sc_3″ el_class=”hidden”][vc_column_inner width=”1/3″ css=”.vc_custom_1584531046632{padding-top: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text]Common shares
Common shares provide investors ownership in a company and offer the potential for both growth and loss. They also may give investors certain voting rights on company matters. In the event of a company liquidation, common shareholders have the lowest claim on company assets.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584531001921{padding-top: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text]Preferred shares
Preferred shares offer investors a greater claim on a company’s earnings and assets, but still carry the risk of losses. Preferred shares are issued with specific terms of payment in the form of dividends, but generally do not have voting privileges.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584531022265{padding-top: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text css=”.vc_custom_1585164388851{border-radius: 2px !important;}”]Flow-through shares
Typically issued by mining and oil and gas companies, they allow exploration and development (E&D) expenses to be considered to be the taxpayer’s expenses for tax purposes. Generally, the purpose of the flow-through share is to help early stage companies finance their E&D costs while aiding investors in reducing their tax bill. Like common shares, investors are still at risk of losing the value of the equity should the company not perform well.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row full_width=”stretch_row” css=”.vc_custom_1584117419480{padding-top: 90px !important;padding-bottom: 90px !important;}”][vc_column width=”1/6″ css=”.vc_custom_1585044010900{padding-top: 16px !important;}”][vc_custom_heading text=”4″ font_container=”tag:h2|text_align:center” use_theme_fonts=”yes” el_class=”font-bely number”][/vc_column][vc_column width=”5/6″][vc_custom_heading text=”Investment funds” use_theme_fonts=”yes”][vc_column_text]Investment funds are professionally managed (by an investment fund manager) so fees apply but the investment is designed to provide you with a broad selection of opportunities. Your investment is pooled into a fund and then invested into a diverse combination of assets.
Why pick investment funds? They offer built-in diversification, are professionally managed and are easy to both buy and sell.
Risk level: Variable
* There are approximately 4500 different investment funds available to Canadians with variable levels of risk giving exposure to different countries, sectors, industries and assets. Always review the risk level indicator found on the fund fact sheet publicly available for any investment fund you are interested in before investing.[/vc_column_text][vc_btn title=”Examples” style=”custom” custom_text=”#c76f58″ size=”lg” i_align=”right” i_icon_fontawesome=”fa fa-angle-down” add_icon=”true” custom_onclick=”true” custom_onclick_code=”toggle_target(‘#sc_4’,this)”][vc_row_inner equal_height=”yes” gap=”15″ el_id=”sc_4″ el_class=”hidden”][vc_column_inner width=”1/3″ css=”.vc_custom_1584531069608{padding-top: 20px !important;background-color: #f7f6f4 !important;border-radius: 5px !important;}”][vc_column_text]Exchange-traded funds (ETF)
A fund that trades on a stock market; most ETFs track an index, such as a stock index or bond index.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584531136868{padding-top: 20px !important;background-color: #f7f6f4 !important;border-radius: 5px !important;}”][vc_column_text]Mutual funds
A pool of money that’s invested for a large number of investors by a professional money manager. A mutual fund is the most common type of investment fund.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584531141922{padding-top: 20px !important;background-color: #f7f6f4 !important;border-radius: 5px !important;}”][vc_column_text css=”.vc_custom_1585164466599{border-radius: 2px !important;}”]Segregated funds
A market-based investment sold by life insurance companies. They are insurance contracts that invest in a diversified group of securities such as stocks, bonds and mutual funds.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row full_width=”stretch_row” css=”.vc_custom_1584115821031{padding-top: 90px !important;padding-bottom: 90px !important;background-color: #f7f6f4 !important;}”][vc_column width=”1/6″ css=”.vc_custom_1585044015866{padding-top: 16px !important;}”][vc_custom_heading text=”5″ font_container=”tag:h2|text_align:center” use_theme_fonts=”yes” el_class=”font-bely number”][/vc_column][vc_column width=”5/6″][vc_custom_heading text=”Alternative investments” use_theme_fonts=”yes”][vc_column_text]These unconventional and complex investments include things like options, futures, foreign currencies, hedge funds, gold, and real estate. They usually offer high potential returns, but also higher-than-average risk and are typically held by institutionally accredited or higher net-worth investors.
Why pick alternative investments? Since they don’t necessarily correlate to the stock market, they can be good to diversify a portfolio and mitigate volatility – but are also complex and higher risk. Always assess your risk tolerance and strengthen your understanding of the alternative investment and the risks you’re taking before investing.
Risk level: Very high risk[/vc_column_text][vc_row_inner equal_height=”yes” gap=”15″ css=”.vc_custom_1584531163121{margin-bottom: 20px !important;}”][vc_column_inner width=”1/3″ css=”.vc_custom_1584531148778{padding-top: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text]Private equity/Exempt market
Private equity or exempt market investments are composed of funds and investors that invest directly in private companies. As the companies are not listed on an exchange, these investments can be difficult to sell.[/vc_column_text][vc_btn title=”Learn more” style=”custom” custom_background=”#c76f58″ custom_text=”#ffffff” link=”url:https%3A%2F%2Fcheckfirst.ca%2Fhow-to-invest%2Finvestment-trends%2Fexempt-market-investing%2F|target:_blank”][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584531170009{padding-top: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text]Derivative contracts
A derivative is a financial instrument (or contract) with a price that is dependent upon, or derived from, one or more underlying assets. Its value is determined by fluctuations in the underlying assets, such as stocks, bonds and commodities currencies.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″ css=”.vc_custom_1584531183144{padding-top: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text css=”.vc_custom_1585089493016{border-radius: 2px !important;}”]Hedge funds
An investment pool that uses advanced investment strategies that are not generally permitted for traditional investments, such as the use of derivatives.[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner equal_height=”yes” gap=”15″][vc_column_inner width=”1/3″ css=”.vc_custom_1584531224542{padding-top: 20px !important;background-color: #ffffff !important;border-radius: 5px !important;}”][vc_column_text]Commodities futures
A commodity futures contract is an agreement to buy or sell a predetermined amount of a commodity at a specific price and date in the future.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row][vc_column][vc_raw_js]JTNDc2NyaXB0JTIwdHlwZSUzRCUyMnRleHQlMkZqYXZhc2NyaXB0JTIyJTNFJTIwJTBBalF1ZXJ5JTI4ZG9jdW1lbnQlMjkucmVhZHklMjhmdW5jdGlvbiUyOCUyOSU3QiUwQSUwOWpRdWVyeSUyOCUyNy5oaWRkZW4lMjclMjkuaGlkZSUyOCUyOSUzQiUwQSU3RCUyOSUzQiUwQWZ1bmN0aW9uJTIwdG9nZ2xlX3RhcmdldCUyOHRhcmdldCUyQ2VsJTI5JTdCJTBBalF1ZXJ5JTI4dGFyZ2V0JTI5LnNsaWRlVG9nZ2xlJTI4JTI3c2xvdyUyNyUyOSUzQiUwQWpRdWVyeSUyOGVsJTI5LmZpbmQlMjglMjdpJTI3JTI5LnRvZ2dsZUNsYXNzJTI4JTI3ZmEtYW5nbGUtZG93biUyMGZhLWFuZ2xlLXJpZ2h0JTI3JTI5JTNCJTBBJTdEJTBBJTNDJTJGc2NyaXB0JTNF[/vc_raw_js][/vc_column][/vc_row][vc_row][vc_column width=”1/3″][/vc_column][vc_column width=”1/3″][vc_btn title=”Subscribe to CheckFirst blogs and investor information” style=”custom” custom_background=”#c76f58″ custom_text=”#ffffff” shape=”round” link=”url:https%3A%2F%2Fcheckfirst.ca%2Femailsubscribe%2F|||” css=”.vc_custom_1599681445621{background-color: #ffffff !important;}”][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]
