Canadian securities regulators establish a new single enhanced self-regulatory organization.

October 21, 2021

Awareness

Alberta Securities Commission is sharing how to properly research any investment and ensure its legitimacy and potential for growth. Relying on social media platforms, self-proclaimed investing gurus, and online forums for investment recommendations can be disastrous. Whether you're assessing the potential of a company or analyzing your existing portfolio, fundamental analysis is the best barometer for gauging the true value of any investment. Learn the five key steps of conducting fundamental analysis and making informed investment decisions about companies you are interested in.

1. Review public reports – When you have found a company that best fits your investment objectives, the first step is to research and understand how the company makes money and any business risks it faces. You can gain a better understanding of that by reviewing public reports on the company’s website or those available on SEDAR (the filing database for the Canadian Securities Administrators) or EDGAR website (U.S Securities and Exchange Commission’s SEC filing database).

2. Understand the company’s financials – Once you feel confident in the company’s business, the next move is to understand the company’s financials. This information can be found in the company’s publicly available annual reports. These reports will help you learn about the company’s debt and obligations as well as its net income at the end of the quarter or year. Additionally, you can learn about the company's return on equity, which can help you determine if it’s using its investment money responsibly.

3. Explore the company’s industry – Next, you want to explore the company's business landscape. At this stage, you can learn about the innovations, disruptions, and opportunities facing the company’s industry. This is also a great time to understand the company’s competitors and whether it has the right products and services to compete.

4. Examine the company’s leadership – You should examine the company’s leadership, including board members and executive team. The purpose of this step is to understand if the company’s leadership has the right experience and management style to make the critical decisions for the company’s success.

5. Finalize your research with trusted and experienced resources – Once you have conducted all of the preceding steps, you can round out your research with additional insights and perspectives on the company. Utilizing information provided by reputable sources like Bloomberg News, Morningstar.ca, TMX.COM, and NASDAQ.com, you can uncover any risks you may have missed during your research or additional growth opportunities. Remember to avoid the temptation of confirmation bias and consider all expert opinions and not just the ones aligned to your own opinion.

The excitement around investing continues to grow, with speculation, social media hype, and ongoing news coverage stoking frenzied investor sentiment. While fundamental analysis will never guarantee investment returns, it will help you move past the online noise and provide you with the knowledge to make informed investment decisions. For more information on investment tips, advice, and how to avoid fraud go to Alberta Securities Commission at www.albertasecurities.com.


Friendly Reminders

Report crime online!

The RCMP are encouraging all Albertans to report eligible crimes online (select property crimes under $5,000). Reporting less serious crimes online helps emergency dispatch and frontline members focus their time on high-priority calls. It provides a convenient way to share photos to the RCMP as well. These reports assist in crime analysis, aid in establishing trends and patterns, and ultimately leads investigators to the chronic offenders. It also assists in making decisions about how and where to deploy resources. Crimes reported online will be taken just as seriously as crime reported in any other way.  

Help reduce crime, report online! #ReportSmart

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