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Buying & Selling Investments

Before buying or selling an investment, do your research and have a good discussion with your advisor.

When deciding whether to buy or sell an investment, there are some important questions you should discuss with your registered investment advisor.

Is This Investment Suitable for Me?

A suitable investment is one that’s appropriate to your risk profile and investment goals when considered in terms of your life circumstances, investment experience, and overall portfolio.

How Does This Investment Work and How Will it Make Money?

Different investments make money in different ways. Whatever investment type you consider, find out what the investment does, how it will make money, who the principals are, their background, and their track record. See our section Types of Investments for more information.

What Are the Risks?

Risk relates to the possibility that you could lose some or all of the money you invested. Investors take risks to earn dividends, interest, or capital gains to increase the value of their assets over time.

It’s critical that you understand what risks an investment carries, what would trigger those risks, and the chances of these events occurring. When you are working with a registered investment advisor, they must create a “risk profile” for you. Your risk profile is a measure not only of your willingness to accept risk but also your ability to lose money.

Does This Investment Come with a Guarantee?

Some investment products, such as principal protected notes (PPNs), offer a guarantee to pay back your principal, even if the investment doesn’t yield returns. But a guarantee is only as good as the credit worthiness of the guarantor. A product guaranteed by the government or a chartered bank is very different from a purported guarantee from an unknown company or an individual involved in selling the investment. Con artists use the promise of guaranteed high returns to attract investors, so we encourage investors to think carefully about all investments with a guarantee feature.

How Much Will it Cost Me?

Make sure you understand how all fees and other charges work. See our Fees & Charges page for more information.

Are There Better Alternatives?

Ask your advisor if they have considered any other investments that might be suitable for you. There may be other investments that would equally support your financial goals, and they may cost less or be less risky.

How Liquid is This Investment?

Liquidity refers to the ease with which you can turn your investment quickly into cash at or near its current market price.

Factors That Affect Liquidity

  • Market Conditions – Changing conditions affect the value of your asset. If your asset is too pricey or if its price is falling, investors may not want to buy it.
  • Lack of a Market – It may be hard to sell an asset that’s not frequently traded.
  • Uncertainty About Value – It’s hard to determine the value of some assets, such as the assets of private companies. This can make the asset difficult to sell.
  • Maturity Date – Some assets, like many bonds, scholarship plans, and GICs can’t be sold until they mature. Even if you can sell them, you may have to pay penalties or you won’t get your full return.

A liquid asset can be sold rapidly, with minimal loss in value, anytime within market hours. If your asset is illiquid, you may have to hold on to it even as it loses value.

Crypto Quiz

Test Your Crypto Asset Knowledge.

This quiz is designed to introduce you to the basics of crypto assets. It is not intended to provide investment or financial advice, and should not be relied upon as a substitute for such advice.

Cryptocurrencies and blockchain are the same thing.