Survey: Investor sentiment jumps the most in 5 years

Popular investment choices

While sentiment around investing is up, there remains a cautious tone. Cash remains the most popular type of investment for the next 12 months at 24 percent. Investors stated they like to have cash on hand when needed (19 per cent) and there is no investment risk which makes them feel secure (14 per cent).

“Although investor sentiment seems to have improved with the Canadian equity market, the interest in cash may imply that investors are still wary about taking on more risk,” said Petursson.

ETF’s have climbed out of negative territory compared to the December 2015 survey results, hitting an all-time high on the index (4 points). However, 14 per cent of Canadians say they are investing less in registered retirement savings plans (RRSPs) and 12 per cent are putting less into tax-free savings accounts (TFSAs). These accounts are, respectively, the Canadian equivalent of IRAs and Roth IRAs in the U.S.

Top concerns for Canadian investors are:

• 27 per cent said they want to manage their current lifestyles.

• 20 per cent said they were concerned with running out of money in retirement. Though, the number of Canadians who are concerned about running out of money in retirement and entering into retirement with debt decreased by five per cent (from 37 per cent to 32 per cent) since 2014.

• Canadian millennials (ages 25-34) are feeling more optimistic about their financial situations than older Canadians. Millenials (40 per cent) feel they will be in a better financial situation than they were two years ago, whereas only 25 per cent of respondents aged 55-plus feel the same. Six in 10 millenials say they will be in a better financial position two years from now. 

Millennials are less likely than other age groups to plan renting over owning a home (52 per cent), and more likely (39 per cent) to buy a house in the next 12 months.

Now in its 16th year, the Manulife Investor Sentiment Index is a semi-annual measure of investors’ views on a range of asset classes, and savings and investment vehicles, as well as their confidence in these areas. The general population data is representative of all Canadians and is based on an online survey of 1,500 respondents who were at least 25-years-old. The survey was conducted in May 2016 by Environics Research.

Related:

Your 401(k) fees are attracting more attention — from lawyers

For 401(k) plan participants, performance & balance are key

More 401(k) millionaires than ever

Your 5 best arguments for life insurance (besides the death benefit)