Canadian investors now invest 14% of their income, up from 12.6% in 2013, according to the latest TD Investor Insights Index, and it may have something to rising stock markets and the confidence they have instilled. Nearly half of investors polled for the study said their portfolio has seen gains in the past 12 months and nearly as many expect the gains to continue.
Bob Gorman, chief portfolio strategist at TD Wealth, says this rising confidence is helping investors get closer to their ideal goal of investing about a quarter of their income each year to meet their long-term financial goals. “With many investors expressing similarly positive views this year, we could see even higher levels of investment going forward.”
In fact, one in five investors said they’re planning to increase the proportion of income they invest if stock markets continue to improve.
“Even if markets slip back somewhat, there are great opportunities for investors to continue to earn solid returns if they choose a balanced portfolio that offers the prospect of growth while respecting their individual tolerance for risk,” Gorman said in a press release Monday.
Still, one-third of investors describe their risk tolerance as low, suggesting the recent economic crisis has left its mark on investors.
Overall, the survey found that funding retirement and achieving financial independence remain the most important long-term investment goals for Canadians. Travel and paying off debt make are also high up on the short-term goals lists.
Despite all these important goals, nearly a third of Canadian investors do not follow an investment strategy or rarely follow one, and that only one in five have a strategy and stick to it each time they make an investment decision. TD also found that almost half of respondents struggle to understand the different investments that are available today and aren’t sure where to go to get trustworthy advice.