Investor Master Glossary
Search any investing or brokerage term and get a clear explanation, why it matters, and how investors use it.
Core Investing Basics
Asset
Anything you own that has financial value or can make money. This includes stocks, cash, property, or funds.
Investors build wealth by collecting and growing assets over time.
Stock
A share of ownership in a company. When the company grows and becomes more valuable, your stock can rise in value.
Some stocks also pay dividends, creating income while you hold them.
Share
A single unit of ownership in a company. If you own 10 shares, you own a small portion of that business and participate in its growth or decline.
Bond
A loan you give to a government or company that pays regular interest.
Often used by conservative or income investors because bonds typically move less than stocks.
ETF (Exchange Traded Fund)
A bundle of many investments packaged into one and traded like a stock.
ETFs help investors diversify instantly and are commonly used for long-term growth and passive income strategies.
Mutual Fund
A professionally managed investment fund that pools money from many investors.
Often used in retirement accounts, though fees are usually higher than ETFs.
Index Fund
A fund that tracks a market index like the S&P 500 instead of trying to beat it.
Popular with long-term investors because of low fees and steady growth over time.
Dividend
Cash paid by a company to shareholders, usually every quarter.
Income investors use dividend stocks to create regular cash flow without selling investments.
Capital Gain
The profit made when you sell an investment for more than you paid.
Many long-term investors focus on capital gains to grow wealth over time.
Capital Loss
When you sell an investment for less than you paid.
Losses are part of investing and can sometimes be used to offset taxes in taxable accounts.
Portfolio
All the investments you own combined.
A strong portfolio is balanced across different assets to reduce risk and create long-term growth.
Diversification
Spreading money across different investments so one drop doesn’t heavily damage your portfolio.
Helps reduce large swings and creates more stable long-term growth.
Asset Allocation
How your money is divided between stocks, ETFs, cash, and other investments.
This is one of the biggest drivers of long-term returns and risk level.
Risk
The chance an investment can lose value.
Higher potential returns usually come with higher risk and larger price swings.
Return
The amount an investment gains or loses over time.
Investors aim to grow returns while managing risk.
Volatility
How much an investment moves up and down in price.
High volatility means larger swings.
Low volatility usually means steadier, slower growth and is often preferred by income investors.
Liquidity
How easily an investment can be sold for cash.
Stocks and ETFs are usually very liquid, while real estate and private investments are less liquid.
Market
The system where investments are bought and sold.
Stock markets allow investors to buy ownership in companies and grow wealth over time.
Exchange
A marketplace where stocks and ETFs trade, such as the TSX or Nasdaq.
Ticker Symbol
The short code used to identify a stock or ETF on the market (example: AAPL or VFV).
Used when searching or placing trades.
Trading & Brokerage Screen Terms
Bid Price
The highest price a buyer is currently willing to pay for a stock.
This is what you will receive if you sell instantly at market price.
Ask Price
The lowest price a seller is willing to accept.
This is what you pay if you buy instantly at market price.
Bid-Ask Spread
The difference between the bid and ask price.
A smaller spread usually means a highly traded, liquid investment.
Large spreads can signal lower liquidity or higher trading cost.
Market Order
An order to buy or sell immediately at the current best available price.
Used when speed matters more than exact price.
Limit Order
An order to buy or sell only at a specific price you choose.
Gives price control and helps avoid overpaying or underselling.
Stop Loss
An automatic sell order triggered if a stock drops to a set price.
Used to limit downside risk and protect capital during market drops.
Stop Limit Order
Triggers a limit order when a set price is reached.
Provides more control than a stop loss but may not always fill in fast-moving markets.
Fill
When your buy or sell order is successfully completed.
If an order doesn’t fill, it remains open.
Partial Fill
When only part of your order is completed because not enough shares were available at your price.
Open Order
An order that has been placed but not yet completed.
Day Order
An order that automatically expires if not filled by market close.
Good Till Cancelled (GTC)
An order that stays active until it fills or you manually cancel it.
Useful for setting buy prices and waiting patiently.
Volume
The number of shares traded during the day.
Higher volume usually means stronger interest and easier buying/selling.
Average Volume
The typical daily trading volume of a stock.
Helps investors judge liquidity and market interest.
52 Week High
The highest price a stock has reached in the past year.
Used to judge whether a stock is near peak pricing.
52 Week Low
The lowest price a stock has reached in the past year.
Some investors look here for potential buying opportunities.
Market Open
The time trading begins for the day (9:30am EST for North America).
Market Close
The time trading ends for the day (4:00pm EST).
After-Hours Trading
Trading that happens outside normal market hours.
Prices can move quickly due to lower volume and news releases.
Pre-Market
Trading that occurs before markets officially open.
Often reacts to overnight news or earnings reports.
Execution
The completion of a trade when your order is filled.
Slippage
When your order fills at a slightly different price than expected due to fast market movement.
Commission
A fee charged by some brokerages when buying or selling investments.
Many modern platforms now offer zero-commission trading.
Spread Cost
The hidden cost created by the difference between bid and ask price when buying and selling.
Position
An investment you currently own.
If you buy a stock, you now hold a position in it.
Position Size
The dollar amount or number of shares invested in one stock or ETF.
Smart investors control position size to manage risk.
Average Cost
The average price you paid for shares, including multiple purchases.
Used to measure profit or loss.
Unrealized Gain
Profit showing on an investment you still own.
Not locked in until you sell.
Realized Gain
Profit officially locked in after selling an investment.
Unrealized Loss
A loss showing on paper while still holding the investment.
Cost Basis
The original price you paid for an investment.
Used to calculate profit or loss when selling.
Accounts, Retirement & Taxes
TFSA (Tax-Free Savings Account)
A Canadian investment account where all growth, dividends, and withdrawals are completely tax-free.
One of the most powerful accounts for long-term investing and wealth building.
RRSP (Registered Retirement Savings Plan)
A retirement account where contributions reduce your taxable income today and investments grow tax-deferred.
Taxes are paid later when money is withdrawn in retirement.
RESP (Registered Education Savings Plan)
An account used to save for a child’s education.
The government adds grants to contributions, helping money grow faster over time.
FHSA (First Home Savings Account)
A Canadian account designed to help save for a first home.
Contributions are tax-deductible and withdrawals for a home purchase are tax-free.
Taxable Investment Account
A standard investing account with no contribution limits.
Dividends and capital gains may be taxed each year depending on activity.
Margin Account
An account that allows you to borrow money from the brokerage to invest.
Can increase gains but also increases risk and potential losses.
Cash Account
A basic investment account using only the cash you deposit.
No borrowing or leverage involved.
Contribution Room
The amount you are allowed to contribute into registered accounts like TFSA or RRSP.
Exceeding limits may trigger tax penalties.
Withdrawal
Taking money out of an investment account.
Some accounts like RRSP may trigger taxes when withdrawn.
Withholding Tax
Tax automatically taken from certain foreign dividends before they reach your account.
Common with U.S. dividend-paying stocks.
Capital Gains Tax
Tax paid on profits when selling investments in a taxable account.
In Canada, only a portion of the gain is taxable.
Tax Deferred
Taxes delayed until a later date, usually when withdrawing from retirement accounts like RRSPs.
Tax Free Growth
Investment growth that is not taxed when withdrawn, such as in a TFSA.
Dividend Tax Credit
A Canadian tax advantage that can reduce taxes owed on eligible dividends from Canadian companies.
Registered Account
An investment account recognized by the government with special tax advantages (TFSA, RRSP, RESP, FHSA).
Non-Registered Account
A regular taxable investing account without special tax treatment.
Pension
Income paid to you in retirement, often from an employer or government program.
CPP (Canada Pension Plan)
Government retirement income paid monthly based on your work contributions during your lifetime.
OAS (Old Age Security)
Government monthly payment to eligible Canadian seniors starting around age 65.
GIS (Guaranteed Income Supplement)
Additional government income for low-income seniors receiving OAS.
Retirement Income
Money received after leaving work, often from pensions, investments, CPP, and savings.
Early Retirement
Leaving the workforce before traditional retirement age using savings and investments to support income.
Compound Growth
When investments earn returns and those returns begin earning returns as well.
This snowball effect is one of the most powerful drivers of long-term wealth.
Reinvestment
Using dividends or profits to buy more investments instead of withdrawing cash.
Accelerates long-term compounding.
Dollar Cost Averaging
Investing a set amount regularly regardless of market price.
Helps reduce the risk of investing all money at the wrong time.
Lump Sum Investing
Investing a large amount all at once rather than gradually over time.
Net Worth
Total value of assets minus debts.
Used to measure overall financial health and wealth progress.
Dividends, Income Investing & Company Fundamentals
Dividend Stock
A company that regularly pays cash to shareholders.
Often used by income investors who want steady payments without selling their investments.
Dividend Yield
The yearly dividend compared to the stock price.
Higher yields can provide stronger income, but extremely high yields may signal risk.
Dividend Growth
When a company increases its dividend over time.
Dividend growth stocks are popular for building rising passive income.
Dividend Aristocrat
A company that has increased its dividend consistently for many years.
Often viewed as stable, reliable long-term income investments.
Ex-Dividend Date
The date you must own a stock before to receive the next dividend payment.
Dividend Payout Ratio
The percentage of company profits paid out as dividends.
Lower ratios often mean safer, more sustainable dividends.
Dividend Reinvestment (DRIP)
Automatically using dividend payments to buy more shares.
Helps accelerate compounding and long-term portfolio growth.
Income Investing
A strategy focused on generating regular cash flow from dividends, interest, or distributions rather than only price growth.
Passive Income
Money earned from investments without active work.
Examples include dividends, interest, or rental income.
Yield
The income produced by an investment relative to its price.
Often used by investors seeking steady cash flow.
Distribution
Cash paid out by ETFs or funds to investors.
Similar to dividends but may include interest or capital gains.
Interest Income
Money earned from bonds, savings accounts, or fixed-income investments.
Fixed Income
Investments designed to produce stable, predictable income such as bonds or GICs.
Typically lower risk and lower growth than stocks.
Blue Chip Stock
A large, well-established company known for stability and reliability.
Often pays dividends and used for long-term investing.
Growth Stock
A company expected to grow quickly and increase in value.
Usually reinvests profits instead of paying large dividends.
Value Stock
A stock considered undervalued compared to its true worth.
Often targeted by long-term investors looking for bargains.
Defensive Stock
A company that tends to stay stable even during economic downturns.
Often found in utilities, healthcare, or consumer essentials.
Cyclical Stock
A company that rises and falls with the economy.
Examples include construction, travel, and luxury goods.
Market Capitalization (Market Cap)
The total value of a company based on its stock price and shares.
Used to classify companies as large, mid, or small cap.
Large Cap
Very large, established companies with stable earnings.
Often considered safer long-term investments.
Mid Cap
Medium-sized companies with growth potential and moderate risk.
Small Cap
Smaller companies with higher growth potential but higher volatility and risk.
Revenue
Total money a company brings in from sales before expenses.
Profit
Money remaining after all company expenses are paid.
Earnings
Another term for company profit.
Strong earnings often drive stock prices higher.
Earnings Per Share (EPS)
A company’s profit divided by total shares.
Used to measure profitability and compare companies.
P/E Ratio (Price to Earnings)
Compares a stock’s price to its earnings.
Helps investors judge whether a stock looks expensive or undervalued.
Forward P/E
A valuation based on expected future earnings instead of past earnings.
Analyst Rating
Professional opinions on whether a stock is a buy, hold, or sell.
Should be used as guidance, not a guarantee.
Price Target
An analyst’s estimated future price for a stock.
Fair Value
What a stock is believed to be truly worth based on fundamentals and growth.
Market Conditions & Economic Terms
Bull Market
A period when stock prices are generally rising and investor confidence is strong.
Bull markets are where long-term wealth is most commonly built.
Bear Market
A period when markets fall significantly (typically 20% or more).
Often creates long-term buying opportunities for patient investors.
Market Correction
A temporary drop of around 10% from recent highs.
Normal and expected in healthy markets.
Market Crash
A rapid and severe drop in stock prices.
Often driven by panic or major economic events.
Recession
A slowdown in economic growth where businesses and markets may struggle.
Long-term investors often continue investing through recessions.
Inflation
The rise in prices over time which reduces purchasing power.
Investing helps money grow faster than inflation.
Interest Rates
The cost of borrowing money set by central banks.
Higher rates can slow markets, while lower rates often boost them.
Federal Reserve / Central Bank
The organization that controls interest rates and money supply.
Their decisions strongly influence markets.
Economic Cycle
The natural rise and fall of the economy over time.
Includes expansion, slowdown, recession, and recovery.
GDP (Gross Domestic Product)
The total value of goods and services produced by a country.
Used to measure economic strength.
Investor Psychology & Strategy
FOMO (Fear of Missing Out)
Buying investments because they are rising quickly and everyone else is buying.
Often leads to poor timing and overpaying.
Panic Selling
Selling investments during drops out of fear.
Can lock in losses and hurt long-term returns.
Buy and Hold
A long-term strategy of holding investments through market ups and downs to build wealth over time.
Long-Term Investing
Holding investments for years or decades to benefit from growth and compounding.
Day Trading
Buying and selling within the same day trying to profit from short-term price moves.
Higher risk and requires experience.
Swing Trading
Holding investments for days or weeks to capture short-term trends.
Market Timing
Trying to predict market highs and lows.
Very difficult to do consistently.
Time in the Market
Staying invested long-term rather than trying to time entries and exits.
Historically more reliable for wealth building.
Advanced & Risk Management Terms
Hedge
An investment used to reduce risk in another position.
Often used to smooth portfolio ups and downs.
Hedged ETF
An ETF designed to reduce the impact of currency movements between countries.
Helps smooth large ups and downs caused by exchange rates and is often used by long-term or income-focused investors seeking more stable returns.
Currency Risk
The effect foreign exchange rates can have on international investments.
Currency swings can either boost or reduce returns.
Leverage
Using borrowed money to increase investment size.
Can amplify gains but also increases losses.
Margin
Borrowed money from a brokerage used to invest.
Increases both potential returns and risk.
Margin Call
When a brokerage requires you to deposit more money because borrowed investments dropped in value.
Short Selling
Betting a stock will drop by borrowing shares and selling them first.
Higher risk strategy used by advanced traders.
Hedge Fund
An aggressively managed investment fund using advanced strategies to try to produce high returns.
Private Equity
Investing directly into private companies not publicly traded on stock markets.
IPO (Initial Public Offering)
When a company first becomes publicly traded on the stock market.
Options & Advanced Trading
Options
Contracts giving the right to buy or sell a stock at a set price before a certain date.
Used for hedging or advanced trading strategies.
Call Option
A contract betting a stock will rise in price.
Put Option
A contract betting a stock will fall in price.
Strike Price
The price at which an option can be exercised.
Expiration Date
The date an options contract expires.
Premium
The price paid to buy an options contract.
Covered Call
An income strategy where investors sell call options on stocks they own to generate extra cash flow.
Protective Put
An option used like insurance to protect a stock from major downside.