Vancouver may be Lotus Land, but its residents are far from tranquil.
BMO recently released a new study that found B.C. investors were the most emotional and impulsive investors in the country.
The study found that:
•63% of B.C. investors have made investment decisions based solely on impulse;
•47% said their emotions played a role in choosing their investments;
•45% of B.C. residents aren’t confident investors;
•only 17% bother to do careful research on their investments; and
•15% base their investment decision solely on a company’s name or logo;
Add those findings up and it’s not surprising that investment scammers have continued to fleece investors in Canada’s westernmost frontier. On the flip side, reading the statistics, it’s surprising more investors haven’t lost their hard-earned money in B.C.
Little wonder then that financial institutions and regulators continue to hammer home the need for investors to become more informed about the financial world.
While it’s clear more work needs to be done, B.C. residents are apparently content to remain ignorant, despite continued investments in everything from term deposits and stocks to bonds and other complicated investment vehicles.
Despite years of marketing and numerous workshops, the BC Securities Commission still struggles to raise public awareness of its existence, let alone its role in regulating the securities market. According to the BCSC’s annual report, only 41% of people surveyed who were at least 18 years old knew the BCSC existed in 2012. That’s up 5% from 36% in 2010.
While most baby boomers likely hold a variety of investments, only 55% of people aged 50 and over knew of the BCSC.
Serge Pepin, BMO’s vice-president of investment strategy, advises simply that investors should be looking to a financial planner or investment adviser to help them understand their investment needs and the products they hold.
But investors shouldn’t be afraid to grill potential advisers.
“There’s a certain reluctance to sit down and take the time to interview advisers,” Pepin said, “but you need to make sure the person is knowledgeable and someone you feel comfortable dealing with.”