Take control of your financial future

Part 1 – Investing Basics

What is the New Brunswick Securities Commission?

Crown CorporationEstablished in 2004Double role

Getting started

Know where you’re going financiallyKnow what you’re investing inKnow who you’re dealing withKnow where to go for help

1. SETTING INVESTMENT GOALS

Know where you’re going financially

See: “Investment Planning Worksheet” in your kit

Make a plan

What do I want to accomplish?

– Contribute $10,000 toward your child’s education in 10 years

– Retire in 15 years with an income of $50,000 a year for at least 20 years

Make a plan

How much risk am I willing to take?Risk tolerance may depend on:– What is more important to you – safety or

higher growth– When you need your money– How you react to market ups and downs– If you have any debts– If you have any other sources of income

Make a plan

Am I comfortable enough to do this on my own?– Always check with the NBSC to find out if the

adviser is registered, and if the individual or firm has a record of any disciplinary action.

Make a plan

What type of investment is right for me?– Characteristics– Risk level

2. TYPES OF INVESTMENTS

Know what you’re investing in

See: “Investments at a Glance” in your kit

Types of Investments

Cash and Cash equivalents– Money in your bank account– Canada savings bonds, T-bills and money

market funds– Safe, quick access to your money– Low rates of return in comparison

Types of Investments

Fixed Income Securities– Based on debt– You are lending your money for a certain period

of time in exchange for a promise to pay you interest and to repay the “face value”

– Relatively safe– Better rates of return than cash-equivalent

Types of Investments

Equities– A.K.A. “stocks”– Part ownership– May receive dividends (profits the company

allocates to its shareholders)– Two ways to make money: Dividends, or

increase in stock value– No guarantee – companies don’t have to pay

dividends, and the value can fluctuate

Types of Investments

Investment funds– Collection of investments– Focus on specific investments– Pooling your money– Invest in a variety of investments for a

relatively low cost– Managed by a professional manager

Types of Investments

Mutual Funds– Continually issues units or shares to investors– Risk varies from low to very high– Fees and expenses deducted from the fund’s

assets.– Voting right– Not guaranteed

See: “Understanding Mutual Funds” in your kit

Types of Investments

Alternative Investments– Options– Futures– Foreign currencies (FOREX)– Hedge funds

– Most complicated types of investment– Higher-than-average risk, higher-than-average

return.

Be an Informed Investor

How will the investment make money? What are the total fees to buy, hold and sell the investment? What are the specific risks?How easy would it be to sell the investment if you needed your money right away?Does the investment fit with your goals and risk tolerance

INVESTMENT FRAUD

Spotting the Red Flags of Fraud

See: “Protecting your Money” in your kit

Red Flags of Fraud

Guaranteed high returns – no riskInsider tips – get in now!Offshore investment – tax free!Profit like the experts!Great investment opportunity – your friends can’t be wrong!

See: “Investment Fraud Checklist” in your kit

What the NBSC Can Do

The NBSC can:answer general questions about investment products and services,tell you if a firm or representative is registered in New Brunswick,tell you if an individual or firm has ever been disciplined by the NBSC,suggest options for pursuing your complaint and tell you which organization may be most helpfulenforce compliance with securities legislation, andact against market misconduct, including removing from the market those who do not comply with the law or who cheat investors.

What the NBSC Can Do (Cont)

The NBSC cannot:undo a transaction,give advice on an investment,give legal advice, orcomment on an ongoing investigation.

How you might be approached

Boiler rooms (See: “Boiler Room Scams – Could you be vulnerable?” in your kit)

Internet Fraud (See: “Investment Fraud and the Internet” in your kit)

Affinity Fraud

Reporting Fraud

www.nbsc-cvmnb.ca1-866-933-2222See: “Complaints Resource Kit” in your kit

Remember:

Do a background checkHang up on unsolicited phone callsNever respond to spamUse common senseContact us:

1 866 933-2222www.nbsc-cvmnb.ca information@nbsc-cvmnb.ca @NBSecuritiesCom