Real Estate Investment Opportunities – Too Good to be True? Lately I’ve been getting a lot of calls asking about real estate investment ads that people have seen or heard on the radio and T.V. or in the newspaper and on billboards. I am pleased to get these calls because it tells us that many are calling to “Check First” before they decide whether they will invest in these opportunities. That is great investing behaviour – do your homework first! When people call, one of the questions they ask me is, “How can these investment opportunities offer 18% returns, especially in this market?” Good question. I answer it by reminding them of two of the five things to know before you invest – that is, know what you are investing in and know what your investment goals are. Do you understand the level of risk that’s involved in this investment? Are you comfortable with it? Because, with higher returns comes higher risk. I always tell people that there is no such thing as a “guaranteed high return with no risk”. Callers then say to me, “it must be a pretty safe investment, because it’s “RRSP eligible.” Just because you can claim this investment as an RRSP contribution doesn’t mean it’s less risky. Remember, all investments come with varying levels of risk. To determine how risky an investment is, we always recommend that investors: - ask for written information on the investment and make sure you understand it.
- use the services of an independent professional (that is, someone who is not with the company you’re looking to invest in), such as a registered financial adviser, accountant or lawyer if you need help understanding an investment opportunity.
If the company or individual who is selling you the investment won’t send you the information you need, or discourages you from getting independent advice about the investment, then this should be a red flag. Remember, it’s your money. So keep asking these questions before you part with it and invest. Any other questions you’ve got on your mind about investing? Send them our way and we’ll do our best to answer them. Chances are if you have a particular question, so do other investors.
Comment on this blog... | About this Blog We’ve created this blog to present you with answers to some of the more popular questions we receive from investors. We'll have different subject matter experts blogging about what they know best and we'll update it as new blogs arise. We hope you'll find it interesting and helpful. Today's Blogger Hello, Don Rodgers here and I am the Public Information Officer for the Alberta Securities Commission (ASC). Before coming to work for the ASC, I was a trader and taught technical analysis. I also wrote for two on-line investment websites. As such, I have a great deal of interest in the securities industry and a desire to help answer questions which you may have. Here are some links I think you'll find helpful:
Risk tolerance test
The Prospectus
Real Estate Investment Opportunities
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