Investing is how you can put your money to work and pursue wealth-building goals over time. The Investors Centre may have heard that investing in stocks has a potential to grow more quickly than other types of investments, like savings accounts or certificates of deposit, but it’s important to keep in mind that there’s also risk involved. That’s why it’s essential to have a clear-eyed understanding of your financial situation and how much you can invest before getting started.

The first step is to determine how much risk you’re comfortable taking, or your “risk capacity,” and how long you have to let your investments grow. For example, if you’re saving for retirement in 30 years, you may be willing to take more risk because you have more time to earn back any losses should the market drop. But if you’re planning to retire in only a few years, you may need your investments to perform well now and not later.

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Once you have an idea of how much to invest, you’ll want to research your investment options and choose a broker. Many online brokerages offer a wide variety of investments, from individual stocks and ETFs to mutual funds and exchange-traded products. If you’re looking to keep it simple, consider an index fund. That way, if one or more of the stocks in your portfolio underperform, it won’t affect the performance of the entire group. You may even find that your employer offers a workplace retirement program, which can serve as a great on-ramp to investing, and some offer company matching contributions.