CIBC Poll: Canadian Investors say they remain calm amidst market volatility

Half of Canadians say they rely on their "buy and hold" mentality in turbulent markets, though some admit to worrying and keeping a closer eye on their investments

TORONTO, Nov. 23, 2011 /CNW/ - A new CIBC poll conducted by Harris/Decima shows that half of Canadian investors stay calm and stick to their buy and hold strategy even in volatile market conditions, though some admit to worrying more about their portfolio during swings in the market.

Key findings of the poll, conducted over a 10-day period during which the TSX composite index declined almost 1,000 points in total, include:

  • 51 per cent of Canadians say they remain calm when their investments are fluctuating with the market, sticking to a buy and hold philosophy
  • Another 29 per cent say they "worry a little" about their investments, and check their portfolios more often but don't make immediate changes to their investments
  • 11 per cent of Canadians said they worry enough to make either minor adjustments or major changes in their portfolio

"These poll findings confirm that many Canadians are willing to manage through short term market fluctuations knowing they have a longer term goal in mind," said Christina Kramer, Executive Vice-President, Retail Distribution and Channel Strategy, CIBC. "While there are a number of investors who keep a closer eye on their investments in volatile markets, most Canadians do not make quick decisions about their investments during short term market declines."

Canadians' steady hand in the face of short term market volatility could be a function of their investment goals - as the poll reveals that 53 per cent of Canadian investors say they are investing for the long term. Investment objectives vary by age:

  • Between ages 25 to 54, the majority of Canadian investors (66 per cent) say they are long term investors, with their investment goals many years in the future.
  • Among those 55-64 (at the leading edge of the baby boom), one-third (35 per cent) in this age group remain focused on long term investment goals, while another 41 per cent invest for the medium term, a few years in the future.
  • Among Canadians 65 and over, more investors plan to draw on their investments in the near term to help fund retirement. However, a number of investors in this age group still see themselves as having either medium term (30 per cent) or long term (28 per cent) investment goals.

"There's a natural progression as Canadians move towards retirement to rebalance their investments based on their need to draw on those investments as part of their retirement income," added Ms. Kramer.

Ms. Kramer also noted that periods of market volatility are the times when investors benefit most from the planning they've done with an advisor, as they are better able to look many years into the future towards their investment goals.

"One of the benefits of having mapped out an investing strategy with an advisor is that you have a strong sense of direction over the long term, which better positions you to manage through short term volatility," added Ms. Kramer. "Working with an advisor also gives you a third party to consult if you have concerns about the current market environment and to gain some perspective on your progress towards your long term goals."

CIBC offered the following tips for investors navigating volatile markets:

Talk to an Advisor - Your Advisor can provide a broader view of how your investments are performing and how you are positioned against your long term investment goals. CIBC Advisors can also offer Canadians investment solutions that automatically rebalance portfolios over time to ensure you have the right investment mix to support your long term investment objectives.

Remind Yourself of your Investing Goals - These poll results show that many Canadians have long term goals for their investments. In turbulent markets, it can help to keep in mind the number of years you have before you will need the funds you have invested.

Continue your Regular Contributions - If you are investing regularly into an investment plan, keep up your contributions. It will keep you on track towards your long term goals, and you may benefit from making these regular investments when markets are lower.

KEY POLL FINDINGS

In turbulent markets, % of Canadians who either stay calm or make adjustments in their portfolio:

51% - Remain calm with a buy and hold philosophy
29% - Worry a little and check investments more often, but make no changes
6%  - Worry enough to make some slight adjustments to investments
5% - Worry a lot and make significant adjustments to investments

Time horizon for Canadian investors, by age:

Short Term Investors - may need the money in the near future

Age 25-34: 17 per cent
Age 35-44: 7 per cent
Age 45-54: 9 per cent
Age 55-64: 19 per cent
Age 65+: 28 per cent

Medium Term Investors - investing for a few years in the future

Age 25-34: 14 per cent
Age 35-44: 15 per cent
Age 45-54: 18 per cent
Age 55-64: 41 per cent
Age 65+ : 30 per cent

Long Term Investors - investing for many years in the future

Age 25-34: 62 per cent
Age 35-44: 71 per cent
Age 45-54: 64 per cent
Age 55-64: 35 per cent
Age 65+: 28 per cent

*Where numbers do not add to 100, some respondents were unsure or did not provide a response.

Each week, Harris/Decima interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These data were gathered between September 15th and 25th, 2011 in a sample of 1,101 Canadians holding investments. A sample of this size has a margin of error of +/-2.95%, 19 times out of 20.

During the sample period the TSX declined 962 points. On 4 of the 8 trading days in the survey, the TSX Composite fell more than 100 points.

Survey period began Sep 15 - TSX opened at 12,424
The last trading day in the survey period was Sep 23 - TSX closed at 11,462
Net change in TSX during survey period - Decline of 962 points

CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Press Centre on our corporate website at www.cibc.com.


SOURCE CIBC

For further information:

Kevin Dove, Head of External Communications, 416-980-8835, Kevin.dove@cibc.com


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