What is the goal in mind? Are you looking to finance your children’s education, prepare for your retirement, invest in real estate or do it simply because you like the idea? The answer to this question will enable you to answer the questions that follow.

Your investment choices will be different depending on whether you want to collect your capital in five years or 15 years. The longer the maturity, the more risk you can take since market fluctuations (highs and lows) smooth out over time. The shorter the maturity, the more important it is to choose low-risk investments to try to “secure” your capital yield as much as possible.

Estimate the amount you need to set aside to achieve your goal and always keep separate savings available. Don’t invest if you don't have any back-up savings. In general, your back-up savings should equal about three to six months of wages. Set this money aside in a risk-free savings account so that it’s available immediately if you should need it. Most importantly, only use it in times of hardship (urgent car or home repairs, etc.). This will prevent you from liquidating investments and potentially losing money by doing so.

Don’t stick your head in the sand, either. Inflation is currently higher than the return on savings accounts and not investing, especially if you have the means, also involves a significant risk of capital erosion.

In short, keep a buffer for unforeseen events and short-term projects, and invest part of your capital for your longer-term projects.

Having money and time ahead of you to boost your savings is not enough. You also need a mentality that can withstand crises and stay the course in a storm. If you spend sleepless nights and break into a cold sweat every time your capital loses 10% of its value, do yourself a favour and stay away from stock-market investments.

Always bear in mind that investing is for the long term—this will get you through dips in the market. Remember that as long as you don’t sell, you don’t lose anything.

Of course, everyone takes the ups and downs differently and it’s important to know how much risk you can handle before choosing an investment product. All you have to do is determine your investor profile with your financial advisor.

You know investment performance is observed over the long term. You don't have to check the value of your investment portfolio online every day to see if you’ve earned or lost money. However, don’t forget to analyse and adjust your portfolio regularly, as needed, according to your profile, objectives or financial situation. If you don’t really have the time or the expertise to do that, opt for investment funds or periodic investment plans, or entrust your investment portfolio to professionals.

08/2020