Investment Basics

Equities
Equities (or stocks) provide direct ownership in public companies. They have historically provided investors with the best long-term performance when compared to bonds or cash.

Depending on the size of the company owned, the type of stock held and general capital market conditions, the performance of individual equities can be volatile over the short-term. Investing in a number of stocks across different industries or in different countries can help offset this risk.
Depending on the nature, objectives and degree of success of each company, common stocks can be growth oriented — with profits reinvested to expand the business further. Other stocks can be slower growing, with some of the income generated distributed to shareholders as dividends. Preferred stocks frequently provide prescribed (but not guaranteed) dividend payouts. In all cases, Revenue Canada taxes dividend income at lower rates than interest income — an advantage that is particularly attractive.

The challenge with equities — as with any investment — is to choose those that will provide the growth and/or income best suited to meet your investment needs and risk tolerance. Your BMO Nesbitt Burns Investment Advisor, working with Canada's top-ranked equity research team* can help you find equities that suit your investment objectives. Alternatively, he or she can direct you to a stock mutual fund or BMO Nesbitt Burns managed account program — where professional investment managers make the day-to-day buy and sell decisions on your behalf.

For more information, contact an Investment Advisor at a BMO Nesbitt Burns branch near you.

If you would like a BMO Nesbitt Burns Investment Advisor to contact you, simply complete this brief contact form.

¹ Brendan Wood International Survey. Institutional Equity Research, Sales and Trading Performance in Canada, 2006 Report.