EDMONTON, Dec. 30 /CNW/ - While Canadian investors don't anticipate a quick fix for the Canadian economy, a monthly tracking study conducted by Vision Critical in partnership with Scotiabank shows more than half of investors (53 per cent) feel the economy has stabilized. As a result, there has been a notable increase in the level of confidence in the market as one-fifth of investors are planning to increase their investments.
"The economic and market recovery we've seen over the past several months is clearly beginning to calm the nerves of investors," says Kathy Henderson, a Senior Wealth Advisor with ScotiaMcLeod's Edmonton office. "It's encouraging to see that this regained confidence has prompted investors to make the decision to get back on track with their financial plan."
With 2010 right around the corner, now is the ideal time to take stock of your financial situation and Ms. Henderson offers some fundamental strategies to help investors get and stay on track in the year ahead.
1. Don't veer from your financial plan. While it's important to be
flexible, don't allow yourself to get off track. Unless your
goals have changed dramatically, there are good reasons why you
selected your asset mix. While the markets have recovered
considerably, they are still down 24 per cent from their high
back in June 2008. By sticking with your plan, you will reap
the benefits as the markets continue to recover.
2. If you don't have a financial plan, don't put it off any
longer. It's tough to stay on track when you don't know where
you're going. An investment advisor can help you frame your
short and long-term goals and recommend a plan, including
appropriate financial and investment strategies, to help you
get where you want to go. Based on results from the most recent
release of Wealth Management Index, a quarterly syndicated
study of the Canadian investor conducted by Vision Critical,
only 42 per cent of Canadian investors have a personalized
3. Set reasonable expectations and then choose your investment
asset mix accordingly. If your expectations are too high, your
asset mix may be too aggressive and out of step with your
appetite for risk. As investors get closer to retirement, they
will need to fine-tune their investment strategy.
4. Dividend paying companies should be considered for your
investment portfolio. By including large, "blue chip" companies
that increase dividends every year, your portfolio may receive
a significant boost. A dividend provides between two to four
per cent return on investment. If you can get another four per
cent from the growth of the company you have invested in, then
you have a nice return for the year that will allow you to keep
up with inflation and hold on to your buying power.
5. Paying down debt vs. investing shouldn't be an "either-or"
situation. It's important to do both, especially now while
interest rates are low, thereby reducing the carrying costs of
debt, and the markets are poised for continued recovery. There
are a variety of strategies that can help you do both. For
example, make an RRSP contribution and then use your refund to
pay down debt - starting with consumer debt such as higher rate
department store and other credit cards. Alternatively, explore
options such as a debt consolidation loan that will help you
free up cash to invest.
6. Know what your expenses are. Life seems to move at an ever-
increasing pace and it's easy to lose track of your budget.
With the added pressure of holiday spending behind you, the
beginning of a new year is a perfect time to review your
household balance sheet to track how much money is coming in,
what your fixed expenses are and identify things you're
spending money on that you could live without. Then consider
setting up an automatic savings plan so that the money you're
saving comes straight out of your bank account and can be
redirected to other priorities - whether it's investing, paying
down your mortgage or saving for a family vacation.
7. Enhance your flexibility by opening a Tax-Free Savings Account
(TFSA). This is a great investment/savings tool for Canadians
18 and over, no matter what their stage of life or what their
financial goals are - and offers the flexibility of a short-
term savings vehicle with a longer-term investment plan, all in
one. You can save up to $5,000 each year and all investment
income earned inside the TFSA (capital gains, interest,
dividends) are tax free for life. Unused contribution room is
carried forward indefinitely and amounts withdrawn top up
future contribution room.
For more information on ways to get the upper hand on your finances, check out http://helpmeinvest.scotiabank.com/ or visit your local Scotiabank branch.
See: Canadian Investor Pulse* conducted by Vision Critical for Scotiabank
- Backgrounder: November 4-18, 2009 Data
Canadian Investor Pulse* conducted by Vision Critical for Scotiabank
Backgrounder: November 4-18, 2009 Data
- The economic outlook has stabilized. In November 2009, Canadian
investors continue to see a more stable economy with half (53 per
cent) stating that the Canadian economy will remain unchanged over
the next three months.
- That sentiment was strongest in Quebec (62 per cent) while Western
Canadians were most likely to foresee an improvement over the next
three months (40 per cent).
- Similar to previous months, higher asset households, with
investable assets of $100K+, were most optimistic about the
economy improving over the next three months.
- Investor confidence also stabilized in November 2009 as more
investors indicated they plan to increase their investment into the
market (20 per cent vs. 15 per cent in Oct. '09).
- Compared to the previous month, Atlantic investors were feeling
more confident as 71 per cent were planning to maintain their
current market position and 15 per cent were planning to increase
their investments in the market (vs. 62 per cent and 6 per cent
respectively in Oct. '09).
- Investors in Western Canada were most likely to increase their
investments (23 per cent) relative to investors in Ontario (21 per
cent) and Atlantic Canada (15 per cent).
- Younger investors, continued to demonstrate greater investor
confidence, indicating they planned to increase their investments
in the market (26 per cent of those 18-34 and 25 per cent of those
35-55 vs.14 per cent of those 55+).
- Nearly Seven-in-10 investors (69 per cent) characterized their
financial well-being as "good."
- Investors in Quebec and Atlantic Canada were most likely to rate
their current financial well-being as "good" (70 per cent),
followed by Western Canada (69 per cent) and Ontario (68 per
cent). Atlantic Canadians were also the least likely to rate their
financial well-being as "poor" (8 per cent).
- Ontario investors were the most likely to describe their financial
well-being as "poor" (15 per cent) and the least likely to
describe it as "good" (68 per cent).
- Not surprisingly, as in previous months, as the level of
investable assets increases, those stating that their current
financial well-being is "very good" also increased.
* Each month, Vision Critical in partnership with Scotiabank conducts
1,500 online interviews with Canadian investors who have $25K or more
in investable assets. The results have been statistically weighted
against the profile of 20,000 Canadians who are part of the Vision
Critical Canadian Investor Panel. The Canadian Investor Panel is
recruited from Angus Reid Forum, a nationally representative panel of
Canadian citizens developed and managed by Vision Critical.
For further information: For further information: For more information or to schedule interviews with regional investment advisors: Robyn Harper, Scotiabank Public Affairs - Toronto, (416) 933-1093 or email@example.com; Deborah Spence, Scotiabank Public Affairs - Calgary, (403) 601-4855 or firstname.lastname@example.org; For more information about the Vision Critical Canadian Investor Panel or the Wealth Management Index: Demitry Estrin, Vision Critical Financial Services - New York, (212) 402-8205 or email@example.com