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The Toronto Stock Exchange (TSX) is Canada's largest stock exchange, and the division of the TSX Group that holds senior equities. A broad range of

businesses from Canada, the United States, and other countries are listed on the exchange.

The TSX is headquartered in Toronto, the third largest financial centre in North America, and maintains offices in Montreal, Winnipeg, Calgary, and Vancouver.

The TSX is one of the world's largest exchanges and the third most active in North America behind the New York Stock Exchange and the NASDAQ.

Vancouver Stock Exchange

The Vancouver Stock exchange (VSE) was one of Canada's junior company stock exchanges. On March 15, 1999, the VSE and the ASE (Alberta Stock Exchange) agreed to merge and form the CDNX - the Canadian Venture

Exchange - which will also take on some junior Toronto and Montreal Exchange companies.

The VSE got a bad reputation in the 80's due to many unscrupulous scam artists manipulating VSE listed companies. New regulatory controls and surveillance systems which had been implemented on the VSE were transferred to the new CDNX. In 2002, the CDNX became the TSX-V.

Montreal Stock Exchange

In 1982, the Montreal Stock Exchange (MSE) changed its name to the Montreal Exchange to reflect the growing importance of financial instruments other than stocks – primarily options and futures – on its trading floor.

In 1999, the Vancouver, Alberta, Toronto and Montreal exchanges agreed to restructure the Canadian capital markets along the lines of market specialization, resulting in the Montreal Exchange assuming the position of Canadian

Derivatives Exchange for the following 10 years. Trading in the shares of large companies was transferred to the Toronto Stock Exchange (TSX), and in the trading of smaller companies to the new TSX Venture Exchange.

This change, which reflected the economic reality that most equity trading had moved to the TSE, caused consternation among those in favour of political independence for the province of Quebec, because it means that any future independent Quebec would not have its own equities exchange.

So today the MSE is a Canadian derivatives exchange that facilitates the trading of stock options, interest rate futures and options, as well as index options and futures.

Located in Montreal, Quebec, it is the country's main financial derivative market, while the Winnipeg Commodities Exchange in Manitoba is the home to Canadian commodity derivative trading.

The equity option trading on the Montreal Exchange covers most of the larger Canada-traded companies but is not as broad as the U.S. options markets.

The interest rate derivatives cover short-term banker's acceptances ranging from the overnight rate to the three-month rate and two- and ten-year Canadian

Government Bonds. The index futures and options cover the S&P Canada 60 index and several S&P/TSX sector indexes.

In April 2005, the Toronto Stock Exchange made public its intention of acquiring the Montreal Exchange, circumventing the non-compete agreement that would expire in 2009.

Some typical long term stock results:

• Over a 10-year period, the result was those 5 years out of 29 instances where the stock return was less than the CPI.

• Over a 15-year period, the result was that 1-year out of 24 instances, where the CPI was higher.

• Over a 20 to 25 year period, stock won 100% of the time.

The above results would be even better if the dividend yields were included.

When dollar cost averaging is used, the returns are increased significantly as well.

Yields

Yield to the investment industry is the annual income from an investment expressed as a percentage of the cost or market price. In the case of stocks, yield is simply the indicated annual dividend expressed as a percentage of the market price.

Unlike a stock yield, a bond yield not only reflects the investor’s return in the form of income, but also makes allowances for any capital gain (or loss) realized when the bond matures.

A terminal yield is the final price when shares are sold, against what they cost to buy.

Current yield is the dividend paid as a percentage of the current price. When the shares are sold, a capital gain is realized in the excess over the A.C.B.

Only 50% of the capital gain is subject to tax at Personal Income Tax rates.

Sale (or purchase) of shares incurs a cost base, which is deductible from Capital Gains.

Capital gain

Capital gain is the difference between an asset's purchase price and selling price. (The difference is called a "capital gain" only if it's a positive amount. If it's negative, it's a capital loss.) For example, if you buy 100 shares of Intuit stock at

$35 per share and sell them for $45 per share, your capital gain is $1,000 ($4,500 - 3,500). The capital gains inclusion rate is currently one half. (The inclusion rate is the portion of a capital gain that is subject to income tax.)

Capital loss

A capital loss is the negative difference between an asset's purchase price and its selling price. If the difference between the purchase price of an asset and its selling is positive then it is called a capital gain. For example, if you buy 100 shares of Intuit's stock at $35 per share and then sell them for $25 per share, your capital loss is $-1,000 ($2,500 - 3,500).