Fear of a U.S. recession is not spurring wholesale changes to Canadians’ investment portfolios, according to a new poll released today by Edward Jones.
More than half of Canadians (57%) already invested do not plan to make any changes to their portfolio, according to the poll. Another 12% of those surveyed plan to invest more, it showed.
“While it is encouraging to see investors staying invested during times of economic uncertainty, many should consider adding stocks that have declined and represent good value,” says Kate Warne, a Canadian market strategist at Edward Jones, in a release. “Like a sale at your favourite department store, fears about a recession, and the market declines tied to those worries, can give long-term investors a chance to purchase attractive investments at very reasonable prices.”
The company said the same poll was conducted in the U.S. and found that nearly two-thirds of Americans remain committed to their current investment portfolio despite fears of a recession. As well, one in 10 respondents south of the border plan to invest more money in the stock market, it said.
With market volatility continuing, Warne suggests investors keep an eye out for quality dividend-paying stocks, specifically from companies that have increased their dividends historically. She also notes that high-quality U.S. bonds have a higher yield than their Canadian counterparts, and so people seeking income should consider them. As well, Warne adds that the TSX will likely see more volatility than the U.S. market due to its sensitivity in the energy and material sectors, so diversification is a key to riding out the current wave.
“The economic weather forecast may be calling for thunderstorms, but investors who remain diversified, continue to invest, and recognize the long-term opportunities a recession can provide, will have no trouble spotting the sun through the clouds,” she said.
The survey also showed that Western Canadians are more likely to invest more in the U.S. than Canadians from other regions and those that earn more than $100,000 a year are the most likely to invest more in the U.S. stock market.
Also, Ontario residents and Prairie dwellers are the most likely to change their investment portfolio because of U.S. recession fears, while seniors are the most likely to sit tight, according to the survey.
U.S. recession fears not changing many portfolio decisions: survey
Diversification key as TSX volatility continues, says Edward Jones strategist
- By: Regan Ray
- April 14, 2008 October 31, 2019
- 09:38