1. Know the source

Ignore e-mails and telephone calls from people or companies you don't know offering investments. If they don't know anything about you, it's against the law to offer you investments.

Be careful: scam artists often use company names that are similar to well-known companies.

2. Avoid hot tips and inside information

Hot tips usually don't work out. If someone says they have inside information, don't trust them. Even if it is true, it would be illegal to use it.

Also watch out for cheap or penny stocks. They are often manipulated to drive prices up. Then they crash and your stock is worthless.

3. Take care in choosing your adviser

There are different kinds of advisers offering different advice and products. Make sure that your adviser is registered to buy and sell the investments that interest you. If you take the time to find a good adviser who is right for you, you are much more likely to make good investment decisions.

4. Learn more

The more you know about investing, the easier it is to make good investment decisions. It will also be easier to spot anyone who is trying to give you bad advice.

Don't buy an investment that you don't understand. Your chances of losing money are greater. Always get all the information you need. You'll feel safer and more confident about your decisions.

5. Be willing to say "no"

Don't feel you have to say "yes." Good advisers won't try to pressure you. Only say "yes" when you know the person, understand the investment, and feel that it is right for you. If your instincts tell you "no," listen to them.

6. Look at the future, not just the past

Past performance of an investment is a sign of how it will do in the future. But some investments that do very well one year, or over a period of years, can do very poorly later on. Make your investment decisions based on the outlook for the future, not just on how an investment did in the past.

Remember: Bad information can lead to bad choices

With the Internet, the number of frauds and scams is growing quickly. Many are very convincing and real-looking. To avoid losses, get the best information you can from the best sources.

Learn more

• Read about the (PDF), as rated by the North American Securities Administrators Association
• To find out about insider trading activity, read the from the Ontario Securities Commission (OSC). Or, email the OSC at
• To check the reputation of a company selling mutual funds, stocks, and bonds, you can contact your provincial securities regulator or the Investment Industry Regulatory Organization of Canada (IIROC). If you are buying an insurance-type investment, you can check with the Consumer Assistance Centre at 1-800-268-8099
• To learn more about investment dealer and adviser registration, read Know Who You're Dealing With .

Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.