‘Tis the Season for Smart Financial Goals

The holiday season is upon us! Are you making your shopping lists, and checking them twice? If yes, chances are finances and budgeting are in the spotlight as you draft your holiday spending plan and determine your expenses.

With so many competing priorities, it’s a good idea to organize your financial goals and identify what’s important to you. If you decide investing fits into the picture, you should start by giving careful thought to:

  • your financial assets and your risk tolerance
  • the amount of money you plan to invest
  • what you want to accomplish through investing

It can be easier to find answers to these key points if you have a good understanding of your financial self.

Know Your Financial Self

Knowing your financial self means understanding your risk tolerance, time horizon, and investment knowledge.

Risk Tolerance

Your risk tolerance is your willingness to accept a level of risk in order to achieve a given return. It’s important to identify the level of risk in investment products, making sure the investments you choose fit your risk tolerance and financial situation. Take this quiz to better understand your risk tolerance.

Your investment products should be tailored to reflect your risk tolerance.

Time Horizon and Financial Goals

Your time horizon is a factor that can affect your risk tolerance. Time horizons are the fixed point of time in the future when you plan to or need to meet a short- or long-term financial goal.

During the period between now and your time horizon, you need to be able to build assets and make up losses you might experience. For example, if you have a short time horizon (e.g. paying off high-interest debt), you might not be willing or able to take on much risk. But if your time horizon is longer (e.g. retirement), you may be willing to take on more risk.

Investment Knowledge

Building your financial knowledge takes time and effort. Reading books, taking courses, staying on top of financial news, and talking about the subject with colleagues or friends are all things you can do to learn more. To boost your investment knowledge, our Get Started with Investing video series is a great way to learn investing basics!

Working with a Registered Investment Advisor

Do you feel overwhelmed trying to manage your current expenses, while also trying to plan for your financial future? You might consider working with a registered investment advisor to help you create an investment plan that fits your risk tolerance and time horizon.

There are different types of investment professionals who can provide a different array of services. It’s important to know though that an investment professional that sells securities – investments like stocks, bonds, mutual funds, or exchange-traded funds – must be registered. Learn more by watching this video.

The word ‘registered’ is essential – registration helps protect investors. In general, anyone selling securities or offering investment advice must register with a local securities regulator, like the British Columbia Securities Commission (BCSC). Securities regulators will only register firms and individuals if they’re qualified and meet certain requirements. Be sure to ask questions and conduct a background check when choosing your advisor.

Report a Concern

If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393 or through e-mail at [email protected]. You can also file a complaint or submit a tip anonymously using the BCSC’s online complaint form.

InvestRight.org is the British Columbia Securities Commission’s investor education website. Subscribe to receive email updates from BCSC InvestRight.

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