Page 15 - A Canuck's Guide to Financial Literacy 2020

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The Different Risk Profiles

Equities

The majority of people have stocks in their investment portfolio and who can blame them.
Since 1926, stocks have returned an average rate of 10% annually since 1926. This is a
higher return that you would normally receive from other investment instruments such as
bonds, which are less risky. Stocks are on the far-right end of the risk/reward spectrum. The
more stocks that you're holding in your portfolio, the more volatile your portfolio will be.
However, you will experience a higher return long term if you're buying established, blue
chip companies that have a fairly stable stock price, pay out dividends and are considered
relatively safe.

Fixed Income

Bonds, also known as fixed income are a popular way to offset some of the volatility in your
portfolio that stocks bring. The rule of thumb is that when it comes to investing, you should