We understand that investing can be confusing, especially with all the acronyms and complex jargon – and yes, we’re 100% guilty for using them too. If you're new to investing, it's good to get the hang of these terms so you can make educated decisions and feel more confident. Let's be honest, sometimes it's like deciphering a secret code – kind of like figuring out if your BFF is LOL or if you're dealing with an OMG moment.
In this article, we want to simplify some of the most used investment acronyms. Whether you're just getting started or looking to learn more, our goal is to make the language of investing easier to understand and less intimidating. We want to give you the clarity you need to navigate the world of finance with ease by breaking down these acronyms. By the end, you’ll be an acronym pro, ready to handle not just your ROI but also your FOMO when it comes to talking investments!
Here’s your simple breakdown of essential investment acronyms used by financial advisors in Canada:
1. CFP - Certified Financial Planner: A formal recognition of expertise in the areas of financial planning, taxes, insurance, estate planning, and retirement.
2. CESG - Canada Education Savings Grant: A grant from the Canadian government to help parents save for their children’s education through RESPs.
3. CPP - Canada Pension Plan: A government pension plan that provides retirement, disability, and survivor benefits.
4. EFT - Electronic Funds Transfer: A system of transferring money from one bank account to another electronically, without the need for paper checks.
5. EPS - Earnings Per Share: A company’s profit divided by the outstanding shares of its common stock.
6. ETF - Exchange-Traded Fund: A type of investment fund that is traded on stock exchanges, much like stocks.
7. ESG - Environmental, Social, and Governance: Criteria used to evaluate a company’s operations and performance in these three areas, often used by investors to screen potential investments.
8. GIS - Guaranteed Income Supplement: A monthly benefit for low-income Old Age Security recipients.
9. GIC - Guaranteed Investment Certificate: A Canadian investment that offers a guaranteed rate of return over a fixed period.
10. HISA - High-Interest Savings Account: A type of savings account that offers a higher interest rate compared to a standard savings account.
11. IPO - Initial Public Offering: The process through which a private company becomes publicly traded by offering its shares to the public for the first time.
12. LIRA - Locked-In Retirement Account: A type of registered retirement savings plan that is locked in until retirement.
13. LOC - Line of Credit: A flexible loan from a financial institution that allows you to borrow up to a certain limit.
14. MER - Management Expense Ratio: A measure of the total annual fees and expenses charged by a mutual fund or ETF, expressed as a percentage of the fund’s average assets.
15. NAV - Net Asset Value: The value per share of a mutual fund or an ETF.
16. OAS - Old Age Security: A monthly payment available to most Canadians 65 years of age and older.
17. P/E Ratio - Price-to-Earnings Ratio: A ratio for valuing a company that measures its current share price relative to its per-share earnings.
18. PAC - Pre-Authorized Contribution: A method of automatically transferring a set amount of money from your bank account to an investment or savings account on a regular basis.
19. POA - Power of Attorney: A legal document that gives someone the authority to act on your behalf in financial or legal matters.
20. RESP - Registered Education Savings Plan: A savings plan to help parents save for their children’s post-secondary education.
21. RRIF - Registered Retirement Income Fund: A fund that provides a steady income in retirement, converted from an RRSP.
22. RRSP - Registered Retirement Savings Plan: A retirement savings plan that provides tax advantages for retirement savings.
23. SRI - Socially Responsible Investing: Investing in companies that meet certain ethical, social, and environmental criteria.
24. TFSA - Tax-Free Savings Account: An account that allows Canadians to earn tax-free investment income.
25. TSX - Toronto Stock Exchange: The largest stock exchange in Canada, where shares of publicly held companies are bought and sold.
Download the PDF resource here.
Understanding these acronyms is just the first step in your investment journey. Our dedicated wealth experts are here to provide personalized advice and help you navigate the financial world. Whether you're just starting or looking to diversify your portfolio, don't hesitate to reach out to us for guidance tailored to your specific needs. Let us work together to secure your financial future.
*Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc.
