- TD Waterhouse RSP Poll reveals Canadians' spending and investment
TORONTO, Feb. 4 /CNW/ - Under the mattress? In the freezer? In the cookie
jar? Canadian investors report they are anxious about finances, but stashing
money in different places throughout the house is never the best investment
strategy. Although the 8th annual TD Waterhouse RSP Poll showed that only 2%
of Canadian investors have considered keeping their money under the mattress,
many respondents have lost confidence in their ability to manage their own
investments over the past year, with 24% of investors agreeing with that
statement in 2008 versus 9% in 2007.
"With 2008 being one of the most stressful trading years in history, we
know that investors have more financial worries than ever," says Patricia
Lovett-Reid, Senior Vice-President, TD Waterhouse. "People shouldn't let
market volatility dictate their long-term financial planning and they should
speak with an advisor who can help keep their retirement plan on track."
When it comes to how Canadians are feeling, approximately one half admit
to having enough anxiety about their finances to keep them up at night (at
least occasionally) and nearly 90% of investors acknowledge having at least
some financial worries. Topping the list of financial worries is their
declining value of investments (22%) followed by paying bills and managing
day-to-day expenses (19%), and saving money for retirement (14%).
Women (54%) are more frequently kept up at night by financial worries
than men (41%). Women are more likely to worry about meeting and managing
day-to-day expenses than men (24% versus 14%). Men, on the other hand, are
slightly more likely than women to worry about the declining value of their
investments (23% versus 21%). Forty per cent of Canadians aged 65-69 are kept
up at night by financial worries, compared to 51% of people aged 35-49. People
50 years of age and older are more concerned with the declining value of their
investments (34%) than those aged 18-49 (11%).
Spending and Investing Behaviour
What Canadian investors have done due to the recent financial downturn is
alter their spending and investing habits (49%). The most cited spending and
investment behaviour changes include postponing major purchases such as a
house, car or furniture (52%), charging less on credit (45%) and still making
non-essential purchases but spending less on them (39%). Nearly an equal
number of Canadians (38%) are completely cutting out spending on non-essential
Women have changed their spending behaviour more than men. Nearly 50% of
women have completely cut out spending on non-essential purchases, whereas
only 29% of men have made the same decision. Older investors are more likely
to have switched to less risky investments like GICs (36% of 65-69 year olds
versus 16% of 35-49 year olds).
Recommendations from Patricia Lovett-Reid
"I encourage people to try and find a happy medium with their spending
habits. Don't save until it hurts but don't spend like there is no tomorrow,"
says Patricia Lovett-Reid, Senior Vice-President, TD Waterhouse. "Even when
times are tough, there are ways to ensure that you are empowered and in
control of your financial future."
One way that people can take control of their financial future is to
maximize their RRSP contribution. Contributing the maximum amount possible
into an RRSP may significantly reduce an individual's income tax payment for
that year. Also, inside the RRSP, the investment has the potential to enjoy
tax deferred growth over the years. Lovett-Reid suggests that investors short
of funds could consider borrowing money to contribute to their RRSP and then
paying down the loan with their tax refund.
"Some Canadians may be tempted to store their money 'under their
mattress' in this volatile economy, but in fact hardly any Canadians follow
through with it," says Lovett-Reid. "Of those few Canadian investors who have
actually considered keeping their money in unconventional places, 3% have
stuffed it under their mattress, 3% have let it cool off in their freezer and
2% have hid it amongst the treats in their cookie jar."
Canadians tempted to keep money "under the mattress", are neglecting the
long-term impact of inflation on their purchasing power. For example, 10 years
from now $1,000 will only be worth $820 at a 2% average annual rate of
inflation. Investors with longer time horizons should consider focusing more
on long-term investment return potential rather than short-term volatility
risk. Working with an advisor to set the right asset allocation for a
portfolio can optimize its potential returns without exposing it to
inappropriate levels of market risk.
About the 2008 TD Waterhouse RSP Poll
Since 2000, TD Bank Financial Group has conducted an annual survey to
measure issues related to Canadians' investment intentions and investor
From December 11th to December 18th, 2008, TNS Canadian Facts conducted
an online survey among a randomly selected, representative sample of 1006
Canadian investors between the ages of 18 and 69. To qualify for the survey,
respondents had to be responsible for household financial planning or
investment decisions, hold any savings or investments products, either inside
or outside of registered savings plans, and meet an occupation screen.
Respondents were members of TNS Canadian Facts' Interactive Panel.
About TD Bank Financial Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as
TD Bank Financial Group. TD Bank Financial Group is the sixth largest bank in
North America by branches and serves approximately 17 million customers in
four key businesses operating in a number of locations in key financial
centres around the globe: Canadian Personal and Commercial Banking, including
TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse
and an investment in TD Ameritrade; U.S. Personal and Commercial Banking
through TD Banknorth and TD Bank, America's Most Convenient Bank; and
Wholesale Banking, including TD Securities. TD Bank Financial Group also ranks
among the world's leading on-line financial services firms, with more than 5.5
million on-line customers. TD Bank Financial Group had CDN$563 billion in
assets as of October 31, 2008. The Toronto-Dominion Bank trades under the
symbol "TD" on the Toronto Stock Exchange and New York Stock Exchange.
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For further information:
For further information: Carolyn Abbass, Jennifer Meneses, Paradigm
Public Relations, (416) 203-2223, firstname.lastname@example.org; Barbara Timmins, TD
Bank Financial Group, (416) 307-6498, email@example.com