One in three Canadian investors have lost at least 20 per cent of the value of their investments in one year, according to findings in a new national survey.
And 51 per cent of Canadian investors who lost 20 per cent in one year took no action, says the report commissioned by the Investor Education Fund.
Among the actions of those who did not stay put were flight to safety (36 per cent); firing and/or hiring new advisers (22 per cent); cutting spending (15 per cent); and investing more in the losing investments (13 per cent).
The study also indicates that close to one-quarter of respondents identifying themselves as low-risk investors own “medium- to very- high-risk” products.
On the other hand, seven in 10 self-identified high-risk investors own “low- to medium-risk” products, the research – titled The Canadian Money State of Mind Risk Survey 2014 – indicates.
Only 17 per cent of respondents in the survey said they invest based on gut feeling alone, while 23 per cent said it’s a combination of analysis and emotion and 60 per cent said they only make decisions after careful analysis, the poll found.
Just over half also said they have regretted investing based on emotion, although 40 per cent of those who invested emotionally said they have felt regret only once or twice.
One in 10 in the poll identified themselves as high-risk investors, with six in 10 saying they are medium-risk investors and three in 10 describing themselves as low-risk investors.
“Knowledge of risk capacity at the personal level is very important,” said Investor Education Fund president Tom Hamza.
“Investors need to ask themselves some critical questions,” he said referring to an interactive infographic accompanying the survey.
Users can answer questions regarding their own self-reported investment behaviours and beliefs and then compare themselves to fellow Canadians.
The Investor Education Fund is a non-profit organization supported by the Ontario Securities Commission.
The survey was conducted by The Brondesbury Group via the Internet in English and French in September 2013, with responses from 2,002 people. The overall accuracy of the poll is plus or minus two per cent, 19 times out of 20. Eligible respondents had to have at least one of eight types of investments to participate. Some quotas were imposed to ensure an appropriate mix of age and gender; regional quotas were also used for better accuracy.