Glossary

Exchange-Traded Fund. A basket of many investments you can buy in a single trade, like a stock.

A tiny ownership slice of a company. If the company does well, your share is often worth more.

A loan you make to a government or company. In return they pay you interest and give the money back later.

Management Expense Ratio — the yearly percentage fee an ETF charges you. Lower is usually better.

Yearly income (like dividends or interest) expressed as a percentage of the price.

A cash payment an ETF sends to holders, coming from dividends or bond interest inside the fund.

The profit when you sell an investment for more than you paid for it.

Spreading your money across many investments so no single one can hurt you badly.

Periodically adjusting your portfolio to keep the mix of stocks and bonds where you want it.

A defined list of investments (like the S&P 500). Many ETFs are built to copy an index.

Owning broad low-cost funds long-term instead of trying to beat the market.

Picking specific investments (or paying a manager to) in an attempt to beat the market.

Tax-Free Savings Account (Canada). Growth and withdrawals are tax-free within limits.

Registered Retirement Savings Plan (Canada). Contributions lower your taxable income now; withdrawals are taxed later.

First Home Savings Account. Tax-deductible contributions, tax-free withdrawals for a first home.

Earnings that themselves start earning — the snowball effect that makes long-term investing powerful.

How much an investment's price bounces up and down. Higher volatility means bumpier ride.

The chance that an investment doesn't behave the way you hoped, including losing value.

How you split your money between stocks, bonds, and other categories.

The short symbol used to identify an ETF or stock on the exchange (e.g. XEQT).

Assets Under Management. The total money held inside a fund.