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Stocks
When you buy stocks or “equities,” you become a part owner in a business. Depending on the size of the business, there could be hundreds or thousands of other part owners, or shareholders.
You can make money on a stock in two ways: if the stock increases in value and if the company pays a dividend. A dividend is any profits the company allocates to its shareholders. However, there are no guarantees that a stock will make money or that the company will pay a dividend. The value of a stock can go up or down— sometimes frequently and sometimes by a lot.
Stocks can provide higher returns than other types of investments, but you also have a higher risk of losing some or all of your investment.
Bonds
When you buy a bond, you are lending your money to a government or company for a certain period of time. In return, they promise to pay you a fixed rate of interest at certain times and to repay the “face value” at the end of the bond’s term (its maturity date).
Bonds typically offer better rates of return than cash investments because you’re taking on more risk by lending out your money for a longer period. Many bonds come with a guarantee and are relatively safe. Others offer much higher rates of return, but can be very risky and have no guarantees.
Alternative investments
Alternative investments include more complicated types of investments like options, futures and forward contracts, income trusts, limited partnerships, hedge funds and foreign currency trading. These are typically meant for sophisticated investors who can afford to take more risks.
Investing tailored to you
Do-it-yourself investing
Personal advice
Boost your financial know-how
Check out our Financial Literacy Hub for helpful tips, articles and resources.
Check out our Financial Literacy Hub for helpful tips, articles and resources.
Investments at-a-glance
This guide, from our friends at Canadian Securities Administrators, tells you about different kinds of investments and some things to keep in mind when you’re considering an investment.
Good Wealth Sparks Good Health
If money stresses you out more than anything else, you’re not alone. For the fourth time running, the FP Canada™ Financial Stress Index—conducted in 2021, 2020, 2018 and 2014—shows that money is the No. 1 source of stress in Canadians’ lives.
