5 questions to ask yourself before choosing your next investment

5 questions to ask yourself before choosing your next investment

You work hard for your money, so it’s important to ask yourself the right questions before investing it.

1. What are my objectives?

Why am I investing? Am I investing for my retirement, for a trip around the world or for a down payment on my first house?

Yes, there are RRSPs and TFSAs, but other savings plans are also available. You must therefore choose the one that’s best for you and your objectives.

2. What kind of investor am I?

To answer this question, you have to know yourself.

You have to assess your tolerance to risk and determine how you will react when your investments fluctuate in value.

Beyond personality, consider:

  • Your age
  • Your financial situation
  • When your investment comes to term

To find out, answer the investor profile questionnaire.

There are no right or wrong answers. This is simply information your advisor will use to recommend investments.

3. Do I know enough about each type of investment?

Shares, bonds, mutual funds or segregated funds? Each has its advantages and disadvantages and knowing what they are helps you make the best decisions.

Remember that high return is intrinsically linked to high risk. Just like low risk typically yields a lower return.

For more, consult the Financial Consumer Agency of Canada.

4. With which advisor should I do business?

Navigating the investment world requires a lot of knowledge and expertise. An advisor is the ideal person to help you make important decisions.

Make sure the advisor is certified by a regulatory body in your province and that they have your needs in mind when they suggest a personalized investment portfolio.

Only give your money to well-established investment companies that are registered with a regulatory body, for example:

5. Which funds should I choose?

You are now ready to choose the investment that is best for you.

The golden rule is diversity – don’t put all your eggs in one basket. To mitigate risk, your portfolio must be balanced with bonds and shares having different maturities and in different industries.

Portfolio funds offer diversity with one purchase.

Talk to your advisor!

They can tell you about the following fees:

  • Purchase transaction
  • Management
  • Cashing in before maturity

What’s next?

To make sure your portfolio grows, monitor its progress on a regular basis and periodically re-assess your needs!

Note: This blog post is provided for information purposes only. It is not a substitute for professional legal, financial or fiscal advice. For advice specific to your personal situation, always speak with your advisor. SSQ cannot be held responsible for any decision made as a result of reading this blog post.