NSSC Blog: Before You Invest

Back to Basics: Alternative Investments

Alternative investments are more complicated and complex investments that are generally not suitable for novice investors.

Alternative investments usually take on higher-than-average risk in return for the potential for higher-than-average returns. Due to their complex nature and higher risk, they are meant for very knowledgeable investors and investors that have considerable wealth and can afford to take on the added risk.

Back to Basics: Bonds

A bond is essentially a loan you are making to a company or the government. The bond is secured by the company’s assets, or the government’s tax base. You are loaning your money to the company or government with a promise they will pay you back your principal investment with interest upon maturity.

Back to Basics: Equities

Equities go by many names, including shares and stocks. When you purchase equities, you are purchasing an ownership stake in a public company. This may entitle you to voting rights at shareholder meetings and profits that are allocated to shareholders. These profits are known as dividends and only have to be given to shareholders at the company’s discretion.

Back to Basics: Mutual Funds

A mutual fund is an investment fund made up of a collection of investments. This collection can be similar, all stocks or bonds for example, or a diverse mix depending on the fund’s makeup. A mutual fund can also mimic a specific index such as the S&P/TSX Composite or DowJones.

Back to Basics: The Nova Scotia Securities Commission

The Nova Scotia Securities Commission regulates all securities and derivatives in Nova Scotia. Securities can include investments like bonds, stocks and mutual funds, while derivatives are more complex investments such as forward and future contracts.

The Commission is divided into four main branches:

Policy and Market Regulation

Investor Education

Corporate Finance

Enforcement.

October is Investor Education Month!

October is Investor Education month and we’re getting Back to Basics. We know investing can be challenging for everyone, no matter their financial background or experience. That’s why were starting from the beginning and going over the basics. Throughout October, three times a week on Monday, Wednesday and Friday, we’ll be posting a blog post and an animated short on a basic investing topic. That means the question of the week will be taking a short break, but don’t stop sending in your questions, because it will be back.

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