Canadian investors feeling frozen, helpless and uncertain this winter, even though they expect that the stock market will continue to rise, suggests research from Franklin Templeton Investments Corp.

In its latest national research, Franklin Templeton Investments Corp. found

In a survey conducted the week of January 17 by Angus Reid Public Opinion, 39% of investors described their investment personality as either suspicious or timid. Only 31% of investors described themselves as analytical, risk-taking or opportunistic.

This is the fifth consecutive national survey by Franklin Templeton since 2009 to find strong negative sentiment among Canadian investors. The pessimistic pattern is in stark contrast to market returns over the same period. In 2009 and 2010, the Toronto Stock Exchange soared more than 49% in value and is now only 11% below its record peak.

“The markets have recovered dramatically, but investor confidence has not,” says Don Reed, president and CEO of Franklin Templeton. “We’ve spent two years studying investor’s attitudes towards the market and it’s clear that emotions dictate action.

Many Canadians failed to seize the opportunity and invest in stocks at bargain prices. Even today, with forecasts of continued growth, many investors are still frozen.”

Canadians are bullish… but suspicious

Paradoxically, Canadians are bullish about the investment market’s growth prospects, the survey found.

When asked where we are at in the market cycle, the bulls outnumber the bears by more than three to one. A third of Canadians (34%) don’t know what to think of the market’s future. Of those who have an opinion, 55% expect stock markets will rise while only 16% believe markets will fall. Emerging international markets such as China, Brazil and India were identified by 43% of respondents as representing the greatest investment opportunity in the next decade.

“While Canada’s markets have recovered smartly, global markets have a long way to go — and that’s why there’s so much opportunity,” says Reed. “Equities are on sale. A strong Canadian dollar means it’s a great time for investors to increase their exposure to global stocks because they can buy foreign assets at a discount.”

IE