What you should know before investing


Want to invest but don’t know where to start. Let us help. The following information will help you get started with confidence, alone or with your advisor.

  1. Set investment goals

    Before you can choose an overall investment strategy, you need to know what your goal is. Then, you’ll be able to figure out how much you need. You’ll need to go over every aspect of your current situation: your age, family situation, income, financial obligations, etc. Once you’ve taken that into account, you can begin working towards an attainable goal, whether that means short-term travel plans or a property purchase in the longer term.
  2. Determine your investment horizon

    How much time do you have to reach your goal? If you’re planning to buy a car, you won’t use the same investment strategy you would when planning for your retirement. Once you’ve determined your investment horizon, you can choose investments that are right for you. For short-term goals, less-volatile investments are preferable. Longer term goals broaden your choice of investments and also increase your potential returns. However, you’ll need to stay focused on your investment horizon and keep a cool head in case of a downturn—that will help you reach your goals.
  3. Know your risk tolerance

    Risk tolerance measures how willing you are to take risks and how well you can handle any fluctuations in your investments. Some types of securities, like shares, can be volatile; they have high and lows, both of which can affect your portfolio’s performance. Some people have a lower tolerance for risk and, as a result, would feel better with more stable investments, even if that means returns are moderate. To help you determine your risk tolerance, the Government of Canada has put together a list of questions:1
    • When will you need the money?
    • Do you have enough money set aside for emergencies and to cover debts?
    • Is your job stable?
    • Can you tolerate investments where returns may be unpredictable or subject to sudden changes in value?
    • How would you react if your investments declined in value?

Your risk tolerance level, combined with your goals and investment horizon, will help you figure out your investment profile. All of this will help you determine which investments are right for you.

Want to learn more? There are plenty of places you can find information. The Government of Canada has created an entire site for people who’d like to learn the basics of investing and its common terms External link. This link opens in a new window.. And, of course, you can always speak with your advisor if you have any questions or concerns.

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