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Step 3 - Learn about the various types of investments
At this point you've defined your investment objectives and your investor profile. You are therefore ready for step 3, and not the least important, of your investment approach: learning about the features of the various types of investments available to you.
Investments fall into 3 broad categories:
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Liquid assets |
These include short-term deposits, redeemable savings and money market investments. These types of investments usually mature within 1 year. |
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Fixed-income investments |
These include term deposits of 1 year or more and bonds. The return on these investment vehicles is known in advance and the capital invested is guaranteed at maturity. |
Growth stocks |
These include mutual funds, some indexed savings products and shares in companies listed on the stock exchange. There is no way of knowing in advance what the return on these investments will be. |
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There are many types of investment products. You'll need to choose the ones that best meet your financial needs and your investor profile.
Types of investments
Registered plans
Types of investments
Investment product |
Description |
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Term savings |
Capital invested in term savings is 100% guaranteed and can be invested for anywhere between 30 days and 10 years, at interest rates that are higher than those of regular savings accounts. Some savings products are redeemable, meaning that you can withdraw your capital before maturity. But most term savings products are not redeemable, and investors are charged a penalty if they withdraw their funds before the maturity date. Find out more |
Market-linked guaranteed investments |
An investment similar to term savings, but with a rate of return that, instead of being fixed, fluctuates with the market. The yield is generally higher than term savings, but of course, it all depends on how well the stock
market performs.
Find out more |
Bonds |
This type of investment is like a contract with a government or company. Investors lend them money for a set period of time in exchange for interest on the amount provided.
Find out moreVisit the Desjardins Securities Web site. |
Shares |
When you purchase shares in a company, it’s as if you become a part owner. You become a company shareholder. The percentage you own is largely determined by the number of shares you purchase. If the company does well, the share value increases and the shares may pay dividends, or a part of the company's profits. If the company experiences financial difficulty, investors may end up with less capital than they originally invested when they sell their shares. Find out moreVisit the Desjardins Securities Web site. |
Investment funds |
Investment funds, also known as mutual funds, provide access to markets usually reserved for seasoned investors. They have tremendous advantages. Your investment is pooled with those of other investors and placed in the
hands of experts who manage the fund according to the fund's investment policy. They are also extremely flexible because you can buy or sell shares at any time.
Find out moreSee Investment funds. |
Socially-responsible investments |
You may also choose investment products geared toward sustainable development and individual and collective well-being.
Find out moreSee Socially-responsible investments. |
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Registered plans
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Registered Retirement Savings Plans (RRSPs) |
RRSPs are plans in which your investments grow tax-free. When the funds are withdrawn, they are added the investor's gross income and become taxable. You may, however, withdraw money from an RRSP tax-free to finance advanced
studies with the Lifelong Learning Plan (LLP) or to buy a home with the Home
Buyers’ Plan. Each year, you can contribute up to 18% of your previous year's earnings to your RRSP. You may also add any unused contributions from previous years. What kind of investments should be held in an RRSP? It all depends on the way investment earnings are taxed. See Investments and taxes. Find out moreRead more about RRSPs. |
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Registered Education Savings Plans (RESPs) |
Like RRSPs, RESPs are tax-sheltered accounts in which you can save up for your children's, grandchildren's or other children's post-secondary education.
Find out moreRead more about the RESP. |
Tax-Free Savings Accounts (TFSAs) |
The Tax-Free Savings Account (TFSA) is a registered savings plan in which income and withdrawals are not taxable. You can make your savings grow tax-free and access the money at any time. Compare TFSAs and RRSPs Find out moreRead more about the Tax-Free Savings Account. |
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Which investment should you choose?
Now that you know the main features of investment products, your financial objectives and your investor profile, use our Savings and investment product selector to help you determine which investment best meets your needs.
Did you know?
An investment’s risk factor can come from any of 3 sources: the product, the market and the investor. To find out more, see Assessing an investment's risk.
Find out more
If you'd like to learn more about the complexities of the stock market, Desjardins Securities offers free seminars on a regular basis. Some are even available online. See the list of upcoming events and seminars.
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 At the caisse
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Money question
Are you afraid you might not have enough money when you retire?
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A few statistics
According to an August 2008 Léger Marketing poll on behalf of the Journal de Montréal, 36% of respondents had not made an RRSP contribution in 2007 and 15% had contributed less than $1,000.