You’ve been saving up your money for a number of years and now you want to invest it. Take the time to think about your investment priorities. Here are 4 tips to consider before investing.
1- Figure out your investment goals and investor profile
- What do you want from your investments?
- Are you investing to take a vacation in two years or to buy a house in six years?
- What is your risk tolerance?
- Would you be concerned if your investments lost value?
Generally, the higher your expected returns, the riskier your investments. How comfortable are you investing on your own? Before doing so, ask yourself:
- Do you have a good grasp of financial information?
- Do you have the time to manage your investments and keep track of the markets?
- Should you start off with small investments?
If you decide to deal with a representative, verify that the person and firm are authorized to offer you the investment. Call the AMF Information Centre or consult the Register of firms and individuals authorized to practise.
2- Choose a representative
Choose a representative and firm based on your needs and level of investment knowledge. Not all representatives and firms offer the same services. Ask the representative about his qualifications and experience.
Would you prefer to invest on your own? See the Investing on your own: It’s not for novices! page.
3- Know how your representative is paid
Compare the fees and services of several firms and representatives before choosing one.
Once you’ve made your choice, give your representative clear, specific instructions about any transactions you want to make.
4- Know what you’re investing in
Read the prospectus of any company you’re thinking of investing in. For mutual fundsA mutual fund is made up of money that is pooled by several investors and used on their behalf by a manager to buy shares, bonds or other securities in line with the fund’s objectives. or exchange-traded fundsAn exchange-traded fund (ETF) is an investment fund whose securities are traded on an exchange like shares.
These funds generally track a benchmark index. Unlike a mutual fund manager, an ETF manager does not seek to maximize the fund’s return but only to follow an index; this explains the typically lower management fees for ETFs. (ETFs), read the Fund Facts or ETF Facts.
Always take the time to do your investment homework, using reliable sources of information. Ask questions and learn about the companies in which you’re investing.