Recent surveys indicate that Canadians are very unhappy with low returns, low interest rates and market volatility, for which there appears to be no light at the end of the tunnel. Investors don’t know what to do with their money in this new world where the returns they used to get are almost non-existent. Many are adopting a defensive approach in order to protect their assets and with that, come diminished confidence about investment decisions.
Daily media reports about companies not meeting sales targets, accounting concerns and poor earnings reports are also making investors more sensitive to fees and other costs that reduce their overall investment returns.
As a result, many investors are moving their money back into cash, even though they expect a negative return using this approach.
Alternatively, they may decide to diversify by putting their money into investments outside of the regulated markets. Either investors seek out new opportunities on their own, or they are approached by slick promoters promising guaranteed returns, often through free seminars or well-put together websites.
The combination of investors looking for greater returns that they can get in the regulated markets and smart fraudsters dreaming up new Ponzi schemes is a recipe for disaster. Regulators can only do so much to protect people.
What’s the solution? Investors must do their own due diligence before writing the cheque. Understand the warning signs for an investment scam. Check the CSA’s Disciplined Persons list to see if the person has ever run into trouble with regulators. Talk to a qualified person, ask them to look at the investment and get a second opinion.
These are rough and tough times for investors. At the very least, investors need to hang onto what they already have, not lose it to an unscrupulous individual.
BCSC staff ambassadors tour the province, helping people to protect themselves from fraud and unsuitable investments. Our goal is to enable BC investors to develop critical thinking skills so they can become more informed of steps they should take to protect themselves when investing. Where we are this month Nelson InvestRight seminar […]
The securities regulators of British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia (the “participating jurisdictions”) today announced they have implemented, or to expect to implement, registration and prospectus exemptions that will allow start-ups and early stage companies to raise capital through crowdfunding in these jurisdictions, subject to certain conditions. These exemptions are further to […]