G

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Gross Domestic Product (GDP):

• monetary value of all services provided and finished products made within the borders of a country in a specific time period.

• included components:

  • government expenditures

  • public and personal consumption

  • investments

  • paid constructions costs

  • exports and imports

• measure of economic activity within a country's borders.

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Growth Stock:

• share of a company that either has exhibited or is expected to grow profits faster than the average growth of the market.

• generally do not pay dividends as management focuses on reinvesting profits back into the company to accelerate its growth in the short-term.

• often seen as more expensive due to higher earnings ratio, which can be misleading if company continues to grow rapidly.

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Guaranteed Investment Certificate:

• guaranteed investment issued by a Canadian bank or financial institution.

• locked-in deposit earning interest for specified period of time, during which the investment cannot be withdrawn, in most cases.

• can be locked-in for as little as one month up to as much as 5 years, with longer lock-in periods paying higher interest rates.

• more popularly referred to by its acronym - GIC.

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H

 

High-Yield Bond:

• bond that pays higher interest to offset the higher risk of default associated with lending money to that company or government institution.

• assigned to entities with credit rates of BB or lower.

• also known as Junk Bond.

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Home Equity Line of Credit:

• revolving loan whereby the equity value of the borrower's home is used as collateral/security.

• permits a homeowner to access and borrow the equity value in an owned property.

• loan proceeds can be used for any purchasing needs, although must follow a repayment of schedule of at least monthly interest but may be more, depending on terms.

• most applications require an appraisal and initial set-up fee to establish the line of credit, though interest rates are generally lower on such lines of credit as opposed to unsecured ones. 

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I

 

Initial Public Offering:

• first offering to purchase a corporation's stock on a stock exchange by the general public.

• usually referred to in the media as an "IPO".

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Investment Grade Bond:

• corporate or government bond deemed to be of lower risk to default, thus paying lower interest rates.

• assigned to entities with credit ratings between AAA and BBB.

• generally attractive to conservative investors.

 

J

 

Joint Tenants With Right of Survivorship (JWTROS):

• legal ownership structure with two or more parties named as owners of a financial account or asset.

• each party has equal right to access and use the asset.

• at death of one party, all surviving parties inherit total value of the deceased party's share, usually without having to take the asset through probate procedures.

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Junk Bond:

• see High-Yield Bond.

 

L

 

Laissez-Faire Economics or Capitalism:

• philosophy opposing government intervention in economic and business affairs.

• belief that businesses will be better off, and thus, by extension, so too will society prosper, when government involvement in economic matters is kept at a minimum.

• French term for "hands off" or "allow to do".

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Liability:

• any financial debt or obligation of monetary value owed by a person, corporation or institution.

• expected to be repaid over time through payment of money, goods and/or services.

• appears on the right side of a balance sheet.

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Liquidity:

• ease with which asset or security is quickly bought and sold without significantly disturbing its price.

• level of flexibility in converting security or asset into cash.

• the higher the ease/flexibility, the more liquid the asset is said to be. 

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Long:

• ownership of a security, with the right to transfer ownership, through sale or gift, to someone else.

• gives owner the right to receive income paid by the security

• bestows the right by the owner to share in the profits or losses associated with changing value.