If it’s your first time investing money in Canada, you may feel a little slogged down by all the new terms to know. Fortunately for you, we at Doc’s Consulting know everything there is to know about investing and can help you wade through some of the important terms to know. Here are some common investing vocabulary words that you should know before you dive in.
Your new life investing money in Canada will be a lot easier when you understand what ETFs are. ETF stands for exchange-traded fund, and these are investment funds traded on stock exchanges. Unlike stocks, an ETF operates within a mechanism that keeps it trading close to its net asset value or as close to it as possible.
Income statements refer to the financial statements of a company. These statements show the profit and loss accounting and are useful when showing investors whether the company experienced an overall profit or loss from the month, quarter, or year previously.
Balance sheets are documents that hold data about what a company owes and its assets. The balance sheet and the income statement are two different documents that are both extremely important from a financial and investment standpoint. Balance sheets are used by investors to determine the overall value of a company to assess investment risk.
Mutual funds are often seen as excellent tools for first-time investors who are first getting their feet wet. A mutual fund is an investment pool. Money is collected from many investors. The money is then pooled together to invest in money market accounts, stocks, and bonds.
Everyone has heard of stocks or the stock market, but fewer people know what they are. Stocks are also known as shares or equity and represent ownership of a company. As the company whose stock you own becomes more valuable, so does your stock. This can be a great way to invest your money if you’re starting out and are working with an investment professional to help you identify the stock to buy and when.
Companies purchase bonds to match their liabilities and are therefore bought and traded primarily by financial institutions and insurance companies. Because the value of bonds tends to fluctuate more than stocks do, many investors see investing in bonds as overall safer than investing in stocks. However, this is only partially true. Make sure you’re working with a company that has experience in all investment techniques and methods to ensure you’re making the best choices.
Finally, value investing is a strategy of investing in stocks that historically trade for less than what their value is. If you see an available stock that seems like it should be worth more, and so you buy it in hopes that it will increase in value at some point or over time, you're value investing.
Investing money in Canada may seem tricky if you’re a first-timer but working with the right financial professionals can make it so much easier for you. Let Doc’s Consulting help you build relationships with the best investment companies to help.Investing Money In Canada