Investing in traditional or alternative energy sources

Before investing in the energy sector, be informed

Read the prospectus

Ask for a copy of the prospectusA prospectus is a detailed information document that a company must prepare to be able to sell securities (such as shares) to the public.
It must provide full, true and plain disclosure of all material facts likely to affect the value or market price of the security in question.  . Some issuers may be exempted from the requirement to prepare a prospectus in order to sell securitiesA security is a financial asset issued by a company or a government that grants interests in a business or in a debt obligation and that can be bought or sold.
Here are some examples of securities: 
Treasury billGuaranteed Investment Certificate (GIC)Savings bondSharesEtc., such as sharesA share, also referred to as stock, is an equity security that entitles you to an ownership interest in a company.
The company can distribute a portion of its earnings to shareholders by paying them a dividend.
The shares of companies listed on an exchange are bought and sold at the exchange.
When a company ceases to operate, the proceeds from the sale of its assets are used to pay its debts and taxes, and the rest of the money is distributed to shareholders., but only under certain conditions. Most securities issued without a prospectus are only suitable for certain types of investors, such as accredited investors who have above-average income or assets.

Is it too risky?

Investments in the energy sector, just like investments in the mining sector, can be very risky. Do you have the means to lose all or part of your investment? For example, for an oil company, a lot of extensive and costly research and work are required between the discovery and the exploitation of a petroleum deposit. There is no guarantee that the company will be successful.

Make sure you really understand the nature of the investment and the risks it entails. Are you being offered sharesA share, also referred to as stock, is an equity security that entitles you to an ownership interest in a company.
The company can distribute a portion of its earnings to shareholders by paying them a dividend.
The shares of companies listed on an exchange are bought and sold at the exchange.
When a company ceases to operate, the proceeds from the sale of its assets are used to pay its debts and taxes, and the rest of the money is distributed to shareholders., bondsA bond is a security issued by governments and companies through which an investor lends money to the issuer.
In general, the government or company promises to pay the investor interest at a fixed rate and at certain intervals (for example, 2% per year). Interest is normally paid twice a year. At maturity, the government or company pays back a predetermined amount that is called the face value. The face value is usually $1,000.
There are several types of bonds:
Stripped bondReal return bondConvertible bondSavings bondRetractable bondUnsecured bondEtc. , exchange-tradedAn exchange, such as a stock exchange, is a market where investors can buy and sell securities, including shares and options.
In order for a company to be listed on an exchange, it must meet certain criteria and regulations, relating to accounting practices and information for shareholders, for example.  fund (ETF) units, limited partnershipA limited partnership is a specific form of partnership.
The partnership is managed by a general partner and the capital is supplied by limited partners, whose liability is limited to their investment outlay.
These partnerships usually invest in a particular sector such as real estate or the oil and gas industry.
Most limited partnerships provide tax benefits that may be transferable from the partnership to the limited partners.  units or optionsAn option grants the right to buy (call option) or sell (put option) an asset at a fixed price for a specified period.
The asset, called an underlying interest, may be a common share, a commodity, a currency or an index (such as a stock market index). ? Don’t invest if you don’t understand the proposed investment.

Ask questions

Are you familiar with the “leading-edge technologies” promoted by the company in which you’re being urged to invest? What are the risks?

Who is proposing the investment?