What is an ‘Investment’
An investment is an asset which is purchased with the hope that it will generate income or a dividend and/or will appreciate in the future. For many people, an investment is the purchase of assets that are not consumed today but will be used in the future while for others investments are made to create and preserve wealth.
In our economy and for many who save for retirement, an investment is a purchased monetary asset which will appreciate so as to provide future income in their retirement years.
For most individuals, an investment purchase will include GICs, bonds , Mutual funds, Segregated funds, stocks or real estate property.
A Guaranteed Investment Certificate (GIC) also known as a term deposit, is an investment that offers a guaranteed rate of return over a fixed period of time. Because of its low risk profile, the return is generally less than that of other investments such as bonds, investment funds or stocks.
Investment funds are created by companies which bring together a group of professional investors who invest their money in stocks, bonds, and other securities. Investors who purchase such funds, own shares or units as they are often called, representing a portion of the holdings of the fund.
Advantages of Investment funds
- Professional management by qualified professional investors and analysts.
- Many investors purchase funds because they do not have the time or the expertise to manage their own portfolios.
- An investment fund is a relatively inexpensive way for a small investor to get a full-time management team to make and monitor their investments.
- Diversification – When investors own shares in an investment fund instead of owning individual stocks or bonds, their risk is spread out and significantly reduced (diversification allows investors to participate in a large number of assets so that a loss in any particular investment is minimized by gains in other investments).
- Economies of Scale – Because an investment fund buys and sells large amounts of stocks and bonds regularly, its transaction costs are lower than what an individual would pay for his/her securities transactions.
- Liquidity – Just like an individual stock, an investment fund allows you to request that your shares be converted into cash at any time.
- Simplicity – Buying an investment fund today is made easy! Individuals can open an account with as little as $500 and most companies offer automatic purchase plans with as little as $100 invested on a monthly basis.
Contact us for your investments.