Canadians invest conservatively - MoneySense

Canadians invest conservatively

On average, we’re holding 25% of our portfolios in cash


Canadians are playing it safe when it comes to investing.

Sun Life Global Investments’ Investor Sentiment Report finds investors are holding an average 25% of their portfolio—including both personal savings and employer-sponsored retirement plans—in cash.

The rest breaks down as follows:

Canadian stocks and stock mutual funds (34%);
Canadian bonds and bond mutual funds (13%);
foreign stocks, bonds and mutual funds (12%);
ETFs (5%); and
other (11%).

“To the extent that foreign exposure is indicative of an investor’s risk appetite (and often his or her understanding of the importance of diversification), the 12% average holdings of foreign stocks, bonds and mutual funds is noteworthy,” the survey states.

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Just 16% of investors plans to invest more in foreign assets over the next year. More than half (57%) say no and 26% either don’t know or aren’t sure.

Investors who plan to take on more global exposure say they’ll do so because:
Investors who plan to take on more global exposure say they’ll do so because:

foreign investments add valuable diversification to their portfolio (62%);
foreign investments offer the potential for higher returns (61%);
the Canadian economy is weak (39%);
their financial advisor recommends foreign investments (22%); and
Canadian investments are too risky (13%).
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Of those who don’t plan to add foreign investments, they say it’s because:

they prefer investments to be in Canadian dollars (39%);
the global economy is weak (32%);
foreign investments are too risky (20%);
it’s too difficult to research global investment opportunities (13%); and
their financial advisor doesn’t recommend them (10%).

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The report also finds investors have a positive view about their personal finances over the next five years.

More than half (52%) are either very optimistic (14%) or somewhat optimistic (38%) about their financial future. Twenty-six percent take a neutral view, 18% are somewhat pessimistic and 4% are very pessimistic.

This article originally appeared on Benefits Canada.