Here is a brief glossary to help you make sense of the many different investment vehicles available.

Guaranteed Deposits

You can invest a portion of your capital in a Guaranteed Deposit. This investment tool bears interest at a preset rate for a given term (from 3, 6 or 9 months, or from 1 to 20 years under the Guaranteed Deposits offered by Desjardins Financial Security). The daily interest account is another type of deposit with a guaranteed term. It generally offers a higher interest rate than that chequing accounts.

Multistrategy Investment

There are also multistrategy investment funds (also called hedge funds). Previously only available to institutional investors (banks, pension funds, large corporations) and wealthy investors, these savings products are highly diversified, and protected against market fluctuation. Their success lies in asset and market diversification, and in the skill of the fund managers. For example, Desjardins Financial Security's Strategic Index Plus was designed to take advantage of market fluctuations using a diversification of strategies (buying stocks or fixed-interest securities, taking positions to profit from situations resulting from short-term fluctuations, etc.) in 13 industrialized countries and through active management by close to 80 fund managers. They are term investments with guaranteed capital.

Mutual funds

With mutual funds, you pool your money with other investors. This type of fund uses the funds to buy securities such as stocks, T-bills or bonds. When you invest in a mutual fund, you buy units in the fund. The value of your units may vary, depending on the type of fund and its return. You can sell your units at any time - some fees may apply.

Registered retirement savings plans (RRSP)

If you wish, you can place these investments in a registered retirement savings plan (RRSP), under Canadian tax legislation, allows individuals to defer payment of taxes on their savings until retirement. There are also Group RRSPs, which are offered to groups of employees or members. They consist of a collection of individual RRSPs administered as a group.

Securities

Lastly, the term securities covers all negotiable investment vehicles, such as common and preferred shares, corporate and municipal bonds, futures, etc., for which a certificate of ownership is issued.

Segregated funds

Segregated funds are only offered by insurance companies since the capital invested is guaranteed. At Desjardins Financial Security, the Millennia III segregated funds series offer a 100% guarantee of the capital invested in case of death. The investor selects funds that invest in a wide range of equities and fixed-interest securities.