Low (or no) Risk: A conservative investment such as a Canada Savings
Bond that pays a fixed interest rate based on current rates that is
virtually risk free.
Mark Berch: Inflation Risk: A risk of investing in fixed income instruments is the threat of inflation. The bond market reacts strongly not only to actual inflation, but also to the threat of inflation. A report that the economy is gaining strength and unemployment is falling can cause bond prices to fall and yields to rise. The reason for this is that investors who buy and hold bonds or other fixed income investments may be looking at a term of 10 years before receiving the principal amount invested. If there is a high rate of inflation during this term, then the principal amount to be received will lose purchasing power. Additionally, the steady stream of interest payments the investor is receiving will also be losing purchasing power. To offset this rising general level of prices, investors will expect higher yields on their fixed income investments.
Banker's Acceptances (BAs): Short-term negotiable commercial paper issued by non-financial corporations, but guaranteed as to principal and interest by their banks. The guarantee results in a higher issue price and hence, lower yield. Ian Berch
Eric Berch: Technical Indicators (for return on equities): This is one of four areas used to help analyze and predict future equity prices. These are the result of analyzing investor attitudes and market psychology through the interpretation of charts of stock price trends and trading volumes.
Index: A selection of companies picked to represent the market or a portion of it. Indexes are used as statistical composites and serve as benchmarks for financial performance.
Speculative Equities: Speculative investments result in maximum risk over a short-term. They are typically characterized by maximum price volatility. There are typically no earnings or dividends and consequently the P/E ratio is a useless tool for analysis.
Asset Allocation Fund: Similar to a Balanced fund, but typically without specific minimums and maximums for asset classes. The portfolio manager will move funds among equity, money market and fixed income securities according to the economic outlook.
Eric Berch Mark Berch
Growth fund: A more speculative and volatile fund with the goal of capital appreciation. These funds invest in companies that are in an expansion period and whose stock is expected to appreciate more than the broad market over the long term. Ian Berch
Correlation: How two securities move in relation to one another.
Ian Berch
Mark Berch: Inflation Risk: A risk of investing in fixed income instruments is the threat of inflation. The bond market reacts strongly not only to actual inflation, but also to the threat of inflation. A report that the economy is gaining strength and unemployment is falling can cause bond prices to fall and yields to rise. The reason for this is that investors who buy and hold bonds or other fixed income investments may be looking at a term of 10 years before receiving the principal amount invested. If there is a high rate of inflation during this term, then the principal amount to be received will lose purchasing power. Additionally, the steady stream of interest payments the investor is receiving will also be losing purchasing power. To offset this rising general level of prices, investors will expect higher yields on their fixed income investments.
Banker's Acceptances (BAs): Short-term negotiable commercial paper issued by non-financial corporations, but guaranteed as to principal and interest by their banks. The guarantee results in a higher issue price and hence, lower yield. Ian Berch
Eric Berch: Technical Indicators (for return on equities): This is one of four areas used to help analyze and predict future equity prices. These are the result of analyzing investor attitudes and market psychology through the interpretation of charts of stock price trends and trading volumes.
Index: A selection of companies picked to represent the market or a portion of it. Indexes are used as statistical composites and serve as benchmarks for financial performance.
Eric Berch
Speculative Equities: Speculative investments result in maximum risk over a short-term. They are typically characterized by maximum price volatility. There are typically no earnings or dividends and consequently the P/E ratio is a useless tool for analysis.
Asset Allocation Fund: Similar to a Balanced fund, but typically without specific minimums and maximums for asset classes. The portfolio manager will move funds among equity, money market and fixed income securities according to the economic outlook.
Eric Berch Mark Berch
Growth fund: A more speculative and volatile fund with the goal of capital appreciation. These funds invest in companies that are in an expansion period and whose stock is expected to appreciate more than the broad market over the long term. Ian Berch
Correlation: How two securities move in relation to one another.
Ian Berch
