Canadian investor sentiment in the deep freeze

Many feel helpless and skeptical but believe markets will improve

TORONTO, Jan. 27 /CNW/ - Canadian investors are stuck in the snow bank this winter, feeling frozen, helpless and uncertain - even when they expect that the stock market will continue to rise.

In its latest national research, Franklin Templeton Investments Corp. found 39 per cent of investors described their investment personality as either suspicious or timid. Only 31 per cent of investors described themselves as analytical, risk-taking or opportunistic. The survey of 1,020 Canadians was conducted the week of January 17 by Angus Reid Public Opinion.

It's the fifth consecutive national survey by Franklin Templeton since 2009 to find strong negative sentiment among Canadian investors. The pessimistic pattern is in stark contrast to market returns over the same period. In 2009 and 2010, the Toronto Stock Exchange soared more than 49 per cent in value and is now only 11 per cent below its record peak.

"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 an d invest in stocks at bargain prices. Even today, with forecasts of continued growth, many investors are still frozen."

Canadians are bullish… but suspicious

Paradoxically, Canadians are bullish about the investment market's growth prospects, the survey found. When asked where we are at in the market cycle, the bulls outnumber the bears by more than three to one. A third of Canadians (34 per cent) don't know what to think of the market's future. Of those who have an opinion, 55 per cent expect stock markets will rise while only 16 per cent believe markets will fall. Emerging international markets such as China, Brazil and India were identified by 43 per cent of respondents as representing the greatest investment opportunity in the next decade.

"While Canada's markets have recovered smartly, global markets have a long way to go - and that's why there's so much opportunity," Mr. Reed said. "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."

Who's optimistic? Men, newer Canadians & people with RSPs

In other results, the survey found:

  • Canadians with RSPs are more bullish in their outlook (45 per cent see markets rising compared to 27 per cent without RSPs);
  • Foreign-born Canadian investors are more optimistic in their outlook (five per cent) and are almost twice as likely to describe themselves as risk-takers (13 per cent versus seven per cent) as native-born Canadians;
  • Men are significantly more bullish about the future performance of the market than women. Forty-five per cent of men expect stock markets to rise compared to 28 per cent of women.

About the survey:

On January 19 and 20, 2011, Angus Reid Strategies conducted an online survey among a randomly selected, representative sample of 1,020 adult Canadians. The margin of error for the total sample is +/- 3.1%, 19 times out of 20. The results have been statistically weighted according to Statistics Canada's most current education, age, gender and region census data to ensure a representative sample of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.

About Franklin Templeton Investments

Franklin Templeton Investments Corp. is a wholly owned subsidiary of Franklin Resources, Inc. (NYSE: BEN), a global investment organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Bissett, Mutual Series, Fiduciary Trust and Darby investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and more than US$670 billion (approximately C$668 billion) in assets under management as of December 31, 2010.

Franklin Templeton Investments Corp. has more than 600 employees providing services to more than one million unitholder accounts and more than 200 pension funds, foundations and other institutional investors. Additional information on Franklin Templeton Investments Corp. can be found at

SOURCE Franklin Templeton Investments Corp.

For further information:

Media contacts:

Sarah Kingdon, Consultant, Public Relations, Franklin Templeton Investments, 416.957.6191

Debra Chan, Senior Consultant, Argyle Communications, 416.968.7311 X229

Keith Damsell, Director, Corporate Communications, Franklin Templeton Investments, 416.957.6099

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