Uncertainty continues to be the only certainty in the financial markets these days, and the results of the most recent Russell Financial Health Index remain at low levels comparable to those seen in early 2010, an indication that Canadians are still concerned about volatility in the markets and the overall economy.

For the third quarter of 2011, the Russell Financial Health Index — an online calculator that gauges the overall financial health of Canadian investors — stood at 47.47, slightly lower than the same timeframe last year, and approaching the lowest levels since the benchmark was established in early 2008.

“While the economic recovery is weaker and slower than we would have hoped, especially with volatility in Europe still a significant factor, we remain confident in the global economic recovery,” says Keith Pangretitsch, director of national sales at Russell Investments Canada.

“Our view is that the volatility of the past few months has been driven by short-term investor sentiment more than by corporate fundamentals. In fact, our most recent Investment Manager Outlook found that a majority of investment managers said they see slow, albeit positive growth sustaining the economy.”

Of note this quarter was the fact that two of the 14 indicators surveyed were at an all-time high since the inception of the survey in 2008 as key concerns for Canadians about their financial health in retirement. Interestingly, these were life factors rather than financial factors: children and ageing parents needing help; and financial impact of the death of a spouse.

“These concerns are not surprising,” explains Pangretitsch. “An increasing number of Baby Boomers are finding themselves caught in the ‘sandwich generation’, a financial and emotional squeeze, as they struggle to cope simultaneously with the costs of caring for ageing parents, while helping children pay for school or launch careers — all the while attempting to fund their own retirement.”

Nonetheless, while these life factors have taken on greater importance this quarter, they are still much lower in overall concern than the two key income factors: having sufficient income for a desired lifestyle and having reliable sources of income.