Coverage Overview

The recession has rattled investors’ faith in stocks and in their investment advisors, according to an exclusive and revealing survey conducted for BNN this fall. The survey, sponsored by Standard Life, polled more than 1,000 active and passive investors across the country between October 8th and 14th.

Here are some of the key findings:

The events of the last year have made many investors uncertain about investing in stocks compared to other options such as bonds or real estate. There is faith in the markets but there is uncertainty as to whether stocks are really the best place to invest. Half of retail investors have invested less in the markets than they otherwise would. That said most expect their investments to make solid gains over the next 12 months.

Financial planners, advisors and brokers have taken a hit to their reputations over the events of the last year, but a small one. Many investors still have confidence in the services they receive.

Most Canadian investors are passive: 29 percent of all investors surveyed said they buy and sell only about once a year, and 29 percent were unsure about the frequency of trades they made on average.

The same is true for retail investors, or those with more than $50,000 invested. About 28 percent said they buy and sell about once a year, the majority trade less than once a month, and just 24 percent said they buy and sell at least monthly, while 19 percent were unsure.

Younger investors are much more active: 38 percent of those under 40 trade at least monthly.

And when it comes to confidence, the majority of retail investors are, at most, only somewhat confident when it comes to investing their money in the stock market at the current time. Only about a third said their level of confidence was high.

Meanwhile, those with the most to invest, $150,000 and above, were more likely to have had high levels of confidence than did those with less invested in the markets.

While older retail investors have more to invest on average, they are not necessarily more confident, while younger investors registered higher confidence levels.

          

Advisors & Investor Attitudes

Canadians are a forgiving bunch. While many have grumbled about how well their advisors protected them from the recent market meltdown, most still value the investment advice they receive from brokers and financial planners.

Here are some of the key findings from the BNN Investors' Survey on investor attitudes towards advisors:

• Financial planners, advisors and brokers have taken a small hit to their reputations over the events of the last year, but overall many investors still have confidence in these services. 
 
• While retail investors gave good marks to their brokers, planners and advisors, there’s a divide along age lines when it comes to confidence in and satisfaction with brokers, planners, advisors. Older respondents were much more satisfied, while high value investors were among the most satisfied. Likewise, those with over $150,000 in their portfolios were most likely to say their brokers, advisors or planners were very influential in their investments decisions. 
 
• Women were slightly more likely than men to have higher satisfaction and confidence levels in their advisors. Female respondents and those over 40 were also more likely to say the advice they receive is influential.
 
• Those who buy and sell most often (at least once a month) were somewhat more likely than others to say their advisors were very influential. Those who use online trading were less likely to say they were influenced by their brokers.
 
• Those with the most money to invest were even more likely to rely on advisors. Among those with $50,000-$100,000 invested, roughly half list a broker or planner/advisor as an investment information source.

        

Do-It-Yourself Investing

Investors have access to more information than ever before when making investment decisions. There are also many more inexpensive ways for Canadians to buy and trade stocks. While most still rely on professionals to guide them in their investment decisions, one in five investors choose to go it alone.

Here are some of the key findings from BNN's Investors' Survey on do-it-yourself investors:
 

Younger investors who trade online were more likely to skip professional advice, partially because they don't have as much money to invest although they may have high incomes.
 

Young investors were more aggressive, trade more often, expect higher returns and rely on different sources of information compared to other investors. This group is far less satisfied than others with the services and advice they’ve received from professionals, such as planners, advisors and brokers.

Those who were trading online disproportionately rely on the internet and mainstream media for investment information, and much less on advisors or brokers than other investors.

        

Investor Expectations

BNN hears from the experts day in and day out. But with more and more Canadians taking an increasingly active role in their investments, we thought it was important to find out what the average investor thinks about the markets. Here’s a summary of the key findings from the BNN Investors’ Survey:

• The majority of retail investors are at most only somewhat confident investing their money in the stock market at the current time. Only about a third said they have a high degree of confidence in the markets.

• Those with the most to invest ($150,000 and above) were more likely to have high levels of confidence than those with less invested in the markets.
 
• While older retail investors have more to invest on average they are not necessarily more confident. Younger investors registered higher confidence levels.
 
• Male retail investors were also more likely to have said they were confident investing in the markets at the current time.

• Many respondents have invested less in the markets lately than they otherwise would have. Many are concerned about whether stocks are the safest bet. High value investors were less likely to agree it's safer to invest in real estate and significantly more likely to believe they will make back what they lost over the last year.
 
• Most retail investors are more worried about falling behind than thinking about getting ahead. This view is widely held. Most in each subgroup agreed – male/female, retired, unemployed and employed, and most income groups. Those few who consider themselves aggressive investors were most likely to disagree.
 
• Most respondents have refocused their investments in the past year to plan more for retirement. Even 48 percent of those under 40 agreed they had refocused their portfolio with retirement in mind.
   
• While most still believe long-term investment will yield growth, 41 percent of cautious investors agreed they no longer believe in this strategy. 
 
• While most retail investors are concerned about how secure stock markets are compared to other options, few have strong views. Most are relatively unsure, either somewhat agreeing or somewhat disagreeing they’d rather invest in secure markets than in stocks.
 
• High value retail investors are less concerned. Most with at least $150,000 in investments disagreed that investments in bonds were preferable to stocks given the economy.
 
• Men were also likely to disagree, and are more prepared than women to invest in stocks compared with options like bonds.
 
• In terms of likelihood to gain back what was lost over the last year or so, almost half of retail investors (45 percent) said they either never lost anything, have already made it back, or are very confident they will make it back. Of the remainder, 37 percent hope they will make back what was lost; 16 percent are doubtful. 
 
• Cautious investors are less likely to have lost money, but those that did are less likely to think they will make it back. 

• Most retail investors are bullish. They expect the markets to yield good returns over the next year. In effect they expect markets to outpace economic growth in the next twelve months.
 
• Less than 2 percent of retail investors said they expect their stocks and mutual funds to break even or suffer a loss in the next year. 
 
• Those with more to invest expect higher returns than those with less invested.
 

        

The Payoff

No one wants to work forever, but most investors feel like they’ll have to. The BNN Investors’ Survey offers some eye opening results about the state of Canadians’ nesteggs. Here’s a summary of our key findings. 

 

• Many retail investors have invested less in the market of late than they otherwise would have. Many are concerned about whether stocks are the safest bet.
• Most retail investors have refocused their investments in the past year to plan for retirement. Even 48 percent of those under 40 said they have refocused their portfolio with retirement in mind.
• Those at retirement age and with the largest portfolios were most likely to say they were well served leading up to and during the market crash of last year.
• Those with more to invest are more likely to be of retirement age but even those who are of working age consider saving for retirement a top goal.
• While those at retirement age or near retirement have much more invested in stocks, bonds and mutual funds compared to younger investors, a significant number of this retirement group have less than $100,000 invested.
• Virtually every investor over the age of 40 said having enough retirement income is the most important investment objective.
• For those under 40, having enough to provide for their family's future ranks closely to retirement in importance.
• Retail investors are somewhat more focused on retirement than other investors. For instance, people in this group were less likely compared to other investors, who are on average younger, to rank investing for education, inheritance or a major purchase as high in importance.
• For those with children under 18, saving for education is hugely important, second only to retirement in importance.