Investor confidence rises

Improved investor sentiment among Canadians has locked bulls and bears in a dead heat, according to a new Franklin Templeton survey. The national research noted investor sentiment is at its most positive since the market meltdown of 2008.

“It’s the biggest change in investor sentiment in three years,” said Don Reed, president and chief executive officer, Franklin Templeton.

However, despite the rise in positive sentiment, investors remain divided in their outlook, with 42% in the two most risk-averse categories, describing themselves as “suspicious” (27%) or “timid” (15%). The number of investors saying they were “not sure” has dropped from 30% in June 2011 to 17% today, suggesting that sentiment is firming up.

Reed said there will be a tug of war between the bulls and the bears in 2012 and that “it’s a perfect time for investors to get off the sidelines and re-enter the equity markets.”

Investors also remain deeply divided when it comes to tactics against the backdrop of the current state of the markets. While 30% of investors said they “have a good strategy” and are “sticking with it”, another 30% said they are “not making new investments”.

The survey found a large gap between men and women when it comes to investor sentiment: 50% of men describe themselves as opportunistic, risk-taking and analytical, up from 37% in June last year. In contrast, 32% of female investors identify with these optimistic attributes, up from 24% in 2011.

In complete contrast to the investor outlook, however, the latest RBC Canadian Consumer Outlook Index RBC study concluded that Canadians consumers have lost confidence in the national economy and feel it is less likely that their personal financial situation will improve any time soon.

The study reported that consumers are taking action about the state of their personal finances. Over the next year, almost 31% intend to focus on reducing debt and spending less, while 22% plan to save or invest more, and 23% intend to take all of these actions.