Poll shows women tend to avoid stocks and
millennials shuffle their assets
TORONTO, Feb. 9, 2016 /CNW/ - The majority of
Canadians investing for retirement will stay the course with their
portfolio mix despite recent market volatility, saying that one bad
year in the equity markets won't change their investing style in
2016, finds a new CIBC (TSX:CM) (NYSE: CM CIBC) poll.
Key poll findings include:
- 58 per cent of investors say they won't stray from their
plan because of one bad year and will stick to their long-term
investment strategy in 2016
- 18 per cent will invest more defensively to protect
their original investments
- 5 per cent say they will invest more aggressively to get
higher returns
- 56 per cent did not achieve the returns they expected
over the last year because of declines in equity markets.
"It's encouraging to see that so many Canadians understand it's
important to take the long view and construct portfolios that can
withstand volatility in the markets," says David Scandiffio, President and Chief Executive
Officer, CIBC Asset Management. "While there is a fear factor for
some investors in volatile markets, those who know how to put a
volatile month or a challenging year into perspective are more
likely to be comfortable with their investment strategy, and
investment returns, over the longer-term."
A recent report from CIBC Economics found that Canadians are
holding onto $75 billion in excess
cash because of market volatility. The report notes that
historically Canadians have waited too long to get back into the
market, costing them billions in lost investment returns.
Women more likely to avoid stocks
The poll shows that women are more risk averse than men when it
comes to investing. Women tend to hold a higher percentage of their
portfolio in guaranteed investment certificates (GICs), savings
accounts or other guaranteed investments:
- 43 per cent of women are currently invested primarily in
stocks, compared to 60 per cent of men; and,
- only a third of women (33 per cent) will invest
primarily in stocks, compared to 53 per cent of men
"While financial prudence is certainly an important quality,
time has shown that successful investing requires a balanced,
diversified approach that includes exposure to equity markets,"
says Mr. Scandiffio.
Millennials least satisfied with returns, most likely to make
changes to strategy
The poll also finds that younger Canadians aged 18-34 struggle
the most with their retirement investments. They are the group
least satisfied with their portfolios, with nearly two-thirds
(65 per cent) failing to achieve their expected
returns and a third (33 per cent) saying they plan to change
their asset mix due to market volatility.
Even though the vast majority of millennials admitted in an
earlier poll of feeling both the lack of investing knowledge and
confidence, 43 per cent say in today's poll they won't let
one bad year in the markets knock them off course. Still, as many
as one quarter (25 per cent) don't know what to do and 19
per cent intend to invest more defensively, while 14 per
cent – significantly higher than other age groups – intend to
invest more aggressively to get higher returns.
"When you're young, you have a longer time horizon to invest but
you shouldn't let short-term market noise knock you off course,"
says Mr. Scandiffio. "If you lack the knowledge or time to
regularly monitor your investments, work with an advisor to help
you build your portfolio and find a proper balance between risks
and returns."
Key study findings
Annual return Canadian investors think they need to reach their
investment goals:
Between 0% to
2%
|
4%
|
Between 2% to
4%
|
13%
|
Between 4% to
6%
|
27%
|
Between 6% to
8%
|
18%
|
Between 8% to
10%
|
7%
|
Over 10%
|
5%
|
I don't
know
|
27%
|
Canadian investors who say they earned the expected returns from
their investment portfolio over the last year:
|
Total
|
Age 18-34
|
Age 35-54
|
Age 55+
|
Yes
|
44%
|
35%
|
45%
|
50%
|
No
|
56%
|
65%
|
55%
|
50%
|
Canadian investors who say last year's portfolio performance
will affect the way they invest in 2016:
|
Total
|
Age 18-34
|
Age 35-54
|
Age 55+
|
I will invest more
aggressively to get higher returns
|
5%
|
14%
|
4%
|
1%
|
I will invest more
defensively to secure my original investments
|
18%
|
19%
|
20%
|
17%
|
I will not stray away
from my plan and stick to my long-term strategy
|
58%
|
43%
|
58%
|
67%
|
I don't
know
|
18%
|
25%
|
17%
|
15%
|
Primary current and future investments of Canadian
investors:
|
|
Total
|
Male
|
Female
|
GICs, savings
accounts or other guaranteed products
|
Current
investment
|
38%
|
28%
|
48%
|
Future
investment
|
42%
|
30%
|
53%
|
Bonds, including bond
mutual funds
|
Current
investment
|
11%
|
12%
|
10%
|
Future
investment
|
15%
|
17%
|
14%
|
Stocks, including
mutual funds holding stocks
|
Current
investment
|
51%
|
60%
|
43%
|
Future
investment
|
43%
|
53%
|
33%
|
From January 20th to
22nd, 2016, Vision Critical conducted an online survey
among 1,003 Angus Reid Forum panelists who are Canadian adults with
an investment portfolio for retirement. The margin of error - which
measures sampling variability - is +/- 3.1 per cent, 19 times out
of 20. The results have been statistically weighted according to
age, gender and region. Discrepancies in or between totals are due
to rounding.
About CIBC
CIBC is a leading Canadian-based global financial institution
with 11 million personal banking and business clients. Through our
three major business units - Retail and Business Banking, Wealth
Management and Capital Markets - CIBC offers a full range of
products and services through its comprehensive electronic banking
network, banking centres and offices across Canada with offices in the United States and around the world. You
can find other news releases and information about CIBC in our
Media Centre on our corporate website at www.cibc.com.
SOURCE Canadian Imperial Bank of Commerce