Canadians hesitant to invest

Canadians hesitant to invest

Canadians hesitant to invest

Nicolas Heffernan

Canadians aren’t confident in investing right now with a new Manulife poll finding sentiment has dipped to its lowest levels since the financial crisis.

Along with eroding investor sentiment is the feeling among Canadians that they are in a worse financial position than they were two years ago (26 per cent), according to Manulife's Investor Sentiment Index.

Canadians are increasingly viewing housing as a less attractive investment having dropped three points in the last year. The two largest drops were in British Columbia (13 point decrease since November 2014) and Ontario (decreased six points in the same time period). Canadians are also less likely to prioritize investing in their home in the near future (falling five per cent in the last six months). 

"Canadian investors are facing a long list of uncertainties, including tremendous volatility in both oil prices and the value of the Canadian dollar. The outlook should become more clear over the course of 2016," said Frances Donald, Senior Economist, Manulife Asset Management. "What is most interesting from the survey is the ongoing decline in the Canadian appetite to invest in their own home." 

In the last six months, Canadian investors lost confidence in mutual funds (down eight points), ETFs (down seven points), and balanced mutual funds (down seven points, the lowest it's been since 2011). Fixed income stayed the same (+3 on the index).

"The Bank of Canada has been suggesting that interest rates are on hold or may even fall further over the coming year,"  said Donald. "Yet, interestingly, 40 per cent of Canadian investors still expect interest rates to rise, highlighting the ongoing uncertainty around the interest rate outlook."