Canadians ready to invest, expecting stronger 2004

(October 16, 2003) Canadians are more optimistic about the markets for the upcoming year, but few realize the strength equities have shown already this year, according to a survey by Investors Group.

Despite the TSX Composite index’s year-to-date gains of over 17%, only 36% of respondents were aware of the rally. Optimism for the future is building, with 17% of respondents saying they are enthusiastic about stocks and mutual funds, up from only 8% a year ago.

That optimism is reflected in their investment strategy, with 29% planning to stash more money away in their RRSPs than they did last year.

“Canadians’ rising confidence and enthusiasm for saving and investing is very encouraging,” said Debbie Ammeter, Investors Group’s vice-president of advanced financial planning. “At this point it appears Canadians’ instincts are good but their knowledge could be better.”

Those who were aware of this year’s market performance were more optimistic than those who were unaware, with 60% of those who have kept tabs on the markets expecting a strong 2004. Only 31% of those unaware of the rally expected a better year next year.

Despite numerous economic setbacks identified by respondents — ranging from global conflicts like the war in Iraq to domestic calamities like forest fires and severe acute respiratory syndrome (SARS) — they said they would not be dissuaded from investing.

“Stronger financial markets are always good news for investors, but a financial plan focused on long-term objectives remains essential,” says Enmeter. “Smart investors aren’t thrown off their long-term investment plan by short-term events. They don’t wait for the market to rise before they start contributing to RSPs — the time is now.”

The survey found 44% of men to be optimistic while women were slightly more skeptical with 31% expecting a rising market. Twenty-three per cent of respondents expect returns of 10% or better.

The survey was conducted by Decima teleVox and is considered accurate to within 2.2%, 19 times out of 20.

Are investors being realistic, too optimistic or too pessimistic? Will 2004 bring better results? How will you get your more skeptical clients back investing in the markets? Share your thoughts about this topic in the Talvest Town Hall on Advisor.ca.

Filed by Steven Lamb, Advisor.ca, slamb@advisor.ca