If you needed reassurance that Canadians do, in fact, need financial advice, it’s here. Despite a dominant belief that now is a good time to invest, Canadians are wary of entering the market.
A new survey commissioned by Franklin Templeton Investments finds that bullish sentiment outweighs bearish sentiment by a ratio of four to one. Yet more investors say they are “suspicious” or “timid” (39%) than “analytical, risk-taking or opportunistic” (31%).
Of those who have an opinion on where the markets will head next, 55% expect stocks will rise, compared to just 16% who believe markets will fall. The survey found 34% have no idea what to expect.
“The markets have recovered dramatically, but investor confidence has not,” said Don Reed, president and CEO of Franklin Templeton. “We’ve spent two years studying investor’s attitudes towards the market and it’s clear that emotions dictate action. Many Canadians failed to seize the opportunity and invest in stocks at bargain prices. Even today, with forecasts of continued growth, many investors are still frozen.”
This is the fifth consecutive national survey by the firm to find negative sentiment, since 2009. Over the same period, the S&P/TSX Composite Index has soared nearly 50%.
“While Canada’s markets have recovered smartly, global markets have a long way to go – and that’s why there’s so much opportunity,” Reed says. “Equities are on sale. A strong Canadian dollar means it’s a great time for investors to increase their exposure to global stocks because they can buy foreign assets at a discount.”
The survey found 43% of Canadians believed emerging markets such as China, Brazil and India were represented the greatest investment opportunity in the next decade.