Considerations When Investing

Disclaimer: The following information is intended only as general introductory information to address some common questions. It is not intended to be and must not be relied on as legal advice. Please refer to the specific provisions of Alberta securities laws. We encourage you to seek legal advice from legal counsel familiar with Alberta securities laws.


Saving and investing basics

If you are just getting started or are early on your savings and investing journey, you may have questions like:

  • What’s a TFSA or RRSP? What’s a GIC or ETF?
  • What do investment advisors do? Do I need one?
  • How do I come up with a financial plan?
  • What are the signs of fraud?

The ASC’s CheckFirst website has a number of resources to help you. 

The government of Canada also provides general resources on savings and investments.

Investing in shares, bonds and other securities

If you understand the basics of savings and investing and are considering investing in shares, bonds and other securities, there are various factors to consider to help understand the risks and potential rewards, including:

  • What are the terms of the securities you are buying? What rights do they give you? Are there restrictions on your rights? 
  • What is the track record of the people behind the business?
  • What is the financial history of the business?
  • Do management and key employees have the technical, management, sales and other skills necessary? Are there adequate incentives to retain key staff?
  • What types of fees are being paid to those selling you the securities? How do they compare to other companies?
  • If the business is raising money, how will it be used?
  • What are the plans for the business and the key milestones? What are the major risks?
  • What are the current general industry conditions? How could the current and future global/regional/local economic climate affect your investment? 
  • Is the disclosure clear, concise and plain or technical, vague or confusing?
  • Is the information provided fair and balanced or overly promotional?
  • How much money has previously been raised and how much more is needed? How will this impact your investment?
  • How does this investment fit into your overall portfolio and your risk tolerance?
    • Are you over-concentrated in certain industries or geographical areas or high risk investments?
    • Will you need the money you are investing in the near term?
    • How risky is the investment? Can you afford to lose all or part of the investment?

Investing in the private or exempt market

If you are considering investing in the private or exempt market in a business that is not publicly traded, there are additional factors that you will likely want to consider.

You will not have the rights you would have under a prospectus
You may need to seek out the information needed to make an informed investment decision
You may not have the benefit of audited financial statements
You will need to assess the reliability of financial projections and other forward-looking information and the reasonability of any assumptions
You may need to conduct your own investigation (or due diligence) to understand the nature of the investment, the business and the associated risks
You should investigate to understand the terms of the security you buy and how they are affected by other securities that are outstanding or that may be issued
You should investigate to understand the issuer's business
You should investigate to understand the material risks
You may not receive ongoing information about your investment
You may not be able to realize a return on your investment. You could lose all the money invested
You will be restricted from reselling your securities
You may have difficulty valuing your investment
Misleading statements prohibited even when selling securities under a prospectus exemption
Getting advice - using a registered dealer or adviser