🔴 Advanced · Step 22 of 22 · Topic: Investing & Tax-Free Accounts

In one sentence

Markets go down sometimes, and scammers use fear and excitement to take money, so this post shows how to stay steady and how to check and report a suspicious offer.

Words to know

• Market drop (or crash): a time when the prices of many investments fall at once.
• Dollar-cost averaging: investing the same amount on a regular schedule, no matter what prices do.
• Rebalancing: moving money between your investments to get back to the mix you planned.
• Securities regulator: the government body in your province or territory that oversees investments and the people who sell them.

Step 1: Expect drops; they are normal

Markets go up and down. Big drops have happened many times, and they will happen again.

• In 2008 and 2009, during the global financial crisis, stock markets fell a lot. Recovery took several years.
• In early 2020, when COVID-19 spread, markets fell very fast in a few weeks. Many markets came back within about a year.

In the past, markets have recovered from big drops over time. But this is history, not a promise. Nobody knows when the next drop will come or how long it will last.

This is why Step 15 said: money you need soon should stay safe. Only long-term money belongs in investments that can fall.

Step 2: Keep investing on a schedule

Dollar-cost averaging means you invest the same amount every month. When prices are high, your money buys fewer units. When prices are low, it buys more.

• You don’t have to guess the “right” time to buy.
• In a drop, your regular amount buys more units at lower prices.
• The automatic monthly contribution from Step 17 already does this for you.

It does not remove risk. But it helps you keep going when the news is scary.

Step 3: Don’t check every day

Prices move every day, sometimes a lot. Checking often can make you nervous. Nervous people sometimes sell at the worst time, after prices have already fallen.

• Turn off price alerts in your investing app, if you like.
• Many long-term investors look at their accounts a few times a year.
• Before you sell in a drop, ask: “Has my goal or my time horizon changed?” If not, your plan may not need to change either.

Step 4: Rebalance now and then

Say your plan is 60% stocks and 40% bonds. After a good year for stocks, you might have 70% stocks. After a drop, you might have 50%.

Rebalancing means moving money back to your plan, for example once a year. Many all-in-one funds and robo-advisors do this for you. We go deeper in the Investing Deep Dive topic.

Step 5: Know the red flags of investment scams

Scams often look professional. They may use fake websites, fake celebrity videos or messages from “new friends” online. Watch for these red flags:

• Guaranteed high returns. No real investment can promise high returns with little or no risk.
• Pressure to act now. “Only today” or “Don’t tell anyone” are warning signs. A real opportunity gives you time.
• Crypto get-rich-quick offers. Scammers often use popular trends like crypto. Be careful with trading platforms you find through social media or chat apps.
• “Secret” or insider information. You can’t check it. Trading on real inside information is also illegal in Canada.
• The seller is not registered. Most people and firms that sell investments must be registered.
• Fake approvals. The Canadian Securities Administrators (CSA) say there is no such thing as a “CSA-accredited trader”.

Step 6: Check, and report if something feels wrong

Before you invest:

• Search the person and the firm on the CSA National Registration Search at aretheyregistered.ca.
• Check the CSA Disciplined List and the investor alerts on your provincial securities regulator’s website.
• Ask someone not connected to the offer, like your bank, a lawyer or an accountant.

If you think it is a scam:

• Stop sending money. Don’t share passwords or ID documents.
• Contact your provincial or territorial securities regulator. You can find yours on the CSA website.
• Report to the Canadian Anti-Fraud Centre online at reportcyberandfraud.canada.ca, or call 1-888-495-8501.
• If you lost money, contact your local police and your bank as soon as possible.

Regulators can’t always get your money back. That is why checking first matters so much. See Step 6 for everyday scams too.

Example

Suppose you invest $100 on the first day of each month for three months.

• Month 1: the price is $10. You buy $100 ÷ $10 = 10 units.
• Month 2: the market drops and the price is $5. You buy $100 ÷ $5 = 20 units.
• Month 3: the price is back to $10. You buy $100 ÷ $10 = 10 units.

You invested $100 × 3 = $300. You own 10 + 20 + 10 = 40 units. Your average cost is $300 ÷ 40 = $7.50 per unit.

At the end, 40 units × $10 = $400. You kept investing in the drop, so you bought more units cheaply. Real markets don’t always bounce back this fast. This is only to show how the idea works.

Common mistakes

• Selling everything in a panic after a big drop.
• Stopping automatic contributions when prices fall.
• Trusting a “guaranteed” offer from someone you met online.
• Sending money before checking registration on aretheyregistered.ca.

✅ My checklist

☐ I know market drops are normal and my short-term money is safe
☐ My monthly contribution keeps going in good and bad months
☐ I don’t check my investments every day
☐ I know the red flags of investment scams
☐ I know how to check registration and where to report a scam

Next step → Finish line: My money plan

More in this topic → Investing & Tax-Free Accounts

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There are no affiliate or referral links in this post. This is general information, not financial, tax or legal advice; everyone’s situation is different. Figures were checked in October 2026 and can change.

Sources: CSA: Trading scam using fake accreditation · CSA: Avoiding fraud · CSA: Checking registration before investing · Canadian Anti-Fraud Centre: Report fraud