Canadians largely unaware of 2009 rally

Despite huge gains on world stock markets since the depths of March 2009, most Canadians missed the rally, according to a survey by Franklin Templeton Investments.

Eighty seven percent of Canadians failed to buy into the market during the run-up, apparently because they didn’t even know it was happening — 86% said they were unaware of the gains.

On a year-over-year basis, the S&P/TSX Composite Index gained 30.7%, even with the massive decline that occurred between January and March. That makes 2009 the best year for the index since 1979.

“Franklin Templeton’s research shows that informed investors were best positioned to take advantage of the markets last year,” said James Cook, executive vice-president of Franklin Templeton Investments. “Only 14% of investors knew the TSX rose more than 20% in 2009 — and perhaps that’s why so few benefited from last year’s market surge. It’s important for Canadians to get advice — and get invested.”

Traditionally, investors have been all too eager to chase market performance, piling into an asset class after the best gains had already been made. It would seem the latest market crash has scared them out of this pattern, however.

The survey, conducted by Angus Reid Public Opinion, found 58% had no plans to get off the sidelines in 2010 either. Forty percent described their investment personality as “suspicious” or “timid,” compared to 34% in February 2009.

The survey found investment intentions change dramatically with income and education, with 62% of those with household incomes over $100,000 planning new investments. Education helps too, as 57% of people with a university degree say they will make new investments.

Despite the fact only 13% of Canadians were buyers during last year’s run-up, 29% described themselves as analytical, opportunistic and risk-taking.

The survey also found 14% of men were willing to invest in equity markets, either directly or through mutual funds, compared to 4% of women. In turn, women considered themselves more bearish (48%) than men (38%).

“It’s imperative for Canadian investors to get a good understanding of the investment climate and what’s required to meet their long-term financial goals,” Cook said. “The key is education and advice — and a trusted investment advisor can make a real difference.”

(01/19/10)