by Viola Van de Ruyt, Wealth Advisor | VandeRuyt Wealth Management Group –
September is a time to think about learning. How is your financial literacy? Do you know what the jargon or terms mean?
Every industry has its own language and can make the outsider feel like “it’s a stupid question” to ask. Don’t let fear stand in the way of understanding your personal finances. Here is a cheat sheet of some common terms, but look up other terms on the website Investopedia.
Volatility – This measures the rate at which the price of an investment moves up and down. If the price of an investment changes rapidly over a short period of time, its volatility is high. Conversely, if the price of it rarely changes, its volatility is low.
Inflation – The rate at which prices for goods and services rise. The most commonly used measurement is the Consumer Price Index. Inflation can be viewed positively or negatively depending on the individual viewpoint and rate of change. The opposite to inflation is deflation, which is when prices decline.
Asset Allocation – A strategy that aims to balance risk versus reward by dividing a portfolio’s assets according to an individual’s goals, comfort level and investment horizon.
Net Worth – What you own less what you owe. For example: your home’s market value less what’s owing on your mortgage. A constant increase in net worth marks good financial health.
Risk/Return Trade-Off – The principle that in order to achieve a higher personal investment return, you must be willing to accept greater risk. When considering investments, the goal is to invest to receive the greatest return for the level of risk you are comfortable taking.
Use September as your time for “back to school” for your financial literacy.
For more information visit www.violavanderuyt.ca.
National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada(NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).” I have prepared this report to the best of my judgment and professional experience to give you my thoughts on various financial aspects and considerations. The opinions expressed represent solely my informed opinions and may not reflect the views of NBF.
