For example, an investment may be low-risk or high-risk.

Risk is the probability that an investment's actual return will be less than the anticipated return.

Speculation is considered to be high-risk. An investment is called speculative if the earnings, cash flows, or future values from the investment are uncertain. Risk-free investments do not exist in the marketplace. However, federal government securities are often used as a proxy for a risk-free investment.

6) The investment horizon might be short or long-term. Long term to an active futures trader has a different meaning than to a bondholder.

Generally, in the bond markets short-term identifies investments with a maturity of from one to three years. Three to ten years is considered to be medium-term and long-term for Canadian government bonds can mean maturities of up to thirty years. Some new corporate debt recently issued in the U.S. bond market matures in 100 years. Furthermore, investments in common or preferred shares are valued as perpetuity's since they have no maturity dates.

7) An investment can be either domestic or foreign.

Domestic investments include debt, equity, derivatives, or property located in Canada.

Foreign investments are similar types of investments located outside of Canada.