A survey on Canadian investors, by Franklin Templeton Investment, has suggested they will reach their financial goals but are pessimistic about the prospects of Canada’s stock market and local economy. The survey noted that 85 percent of Canadian investors being optimistic of attaining their financial goals, but 45 percent of them showed concerns about the state of the global economy and 37 percent of them were worried about the falling oil prices. Summing up the observations of the survey and the areas of concern, Ronice Barlow, senior vice president of the Toronto based Franklin Templeton noted, "Investors have experienced a few tough quarters in the equity markets especially in Canada where energy represents about a quarter of the market.”

It said the investor expectations on Canadian stock market will continue to be modest since the returns have decreased by 12 percent since 2014. Some 53 percent of Canadian investors still have modest yet positive expectations about the returns in 2015, according to the detailed results of Franklin Templeton's annual Global Investor Sentiment survey.

US Equity Market

The survey found a palpable jump in the number of Canadian investors thinking that the U.S. equity market is better and offers best returns. However, Stephen Lingard, senior vice president and portfolio manager with Franklin Templeton Solutions cautioned against excessive reliance on the U.S. market, saying it is "dangerous " to chase the top-performing asset classes of 2014. Also most Canadian investors believe that stocks in real estate and precious metals will be the top-performing asset classes in 2015 and for the next 10 years. Those swearing by non-metal commodities have decreased to 8 percent compared to 13 percent in 2014.

The survey also asked Canadian investors about their top three investment goals. The response showed that 70 percent of the respondents had retirement as the popular answer. About 52 percent said vacation planning was a big priority and 40 percent put planning for emergencies as a major area of preparation.

Advice For Investors

Meanwhile, Globe and Mail in a report carried the comments of some experts on the rising fascination of Canadian investors toward the U.S. equity market. Stephen Lingard, senior vice-president and portfolio manager, Franklin Templeton Solutions, put a word of caution and said, “It is never a bad idea to diversity and in many cases your first equity market would be domestic stocks. For those who have very little U.S. exposure, it won’t be a bad thing to add this into a portfolio but our word of caution would be for those investors with significant allocations in U.S. equities as you are buying into a market that is generally more fully valued than any other global equity markets.”

Ronice Barlow, senior VP of Franklin Templeton Investments said the survey pointed to an urgent need to render professional advice to Canadian investors for ensuring that they diversify their portfolio across asset classes to reflect adequate risk tolerance.

(For feedback/comments, contact the writer at k.kumar@ibtimes.com.au)

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