What is the New Brunswick Securities Commission? Crown Corporation Established in 2004 Double role Getting started Know where you’re going financially Know what you’re investing in Know who you’re dealing with Know 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 risk Insider 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 helpful enforce compliance with securities legislation, and act 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, or comment 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.ca 1-866-933-2222 See: “Complaints Resource Kit” in your kit Remember: Do a background check Hang up on unsolicited phone calls Never respond to spam Use common sense Contact us: 1 866 933-2222 www.nbsc-cvmnb.ca [email protected] @NBSecuritiesCom