Canadians investing more

Rising stock markets are boosting investor confidence across Canada, says the latest TD Investor Insights Index.

The index survey adds more than half of investors saw their investments improve over the past 12 months. As such, nearly as many expect continued gains in the year ahead.

In fact, TD finds Canadians now invest 14% of their household incomes, up from 12.6% in 2013. And about 20% plan to increase the proportion of income they invest if stock markets continue to improve.

Read: How long will the bull market last?

As well, more than a third of respondents expect Canadian and U.S. economies to improve over the next 12 months, up from about a quarter in 2013.

Read: Help clients compare U.S. and Canada

“With stock markets hitting record highs recently…investors are in a buoyant mood and [are] looking to invest [more],” says Bob Gorman, chief portfolio strategist at TD Wealth. “Even if markets slip back, there are great opportunities for investors to continue to earn solid returns if they choose balanced portfolios.”

Read: Where investors put money in April

Still, you need to help your clients choose investments and gauge market performance. After living through the recent economic crisis, many people (33%) say their risk tolerance is low, finds the survey. For investors getting close to retirement age, especially, the proportion with a low risk tolerance jumps to 41%.

As such, mutual funds continue to be the most popular type of investment in Canada—they’re held by more than two-thirds of investors. People are also interested in GICs, term deposits, and individual stocks and shares. Additionally, real estate is a popular investment with 40% of respondents.

Read:

• The REIT solution
• Investors dropped bonds more hastily

Help clients meet goals

In the long term, most people are focusing on saving for retirement and paying off debt, says the survey.

And in the short term, respondents want to travel and buy houses, though they also want to start tackling their long-term goals.

Read: Short-term goals increase planning success

The problem is nearly a third of Canadian investors don’t have an investment strategy. Of those who do, only 20% stick to their financial plans each time they make independent investment decisions.

As well, almost half of investors don’t understand the different types of investments available to them. If you offer people an overview of markets and common investments, they’ll be more comfortable working with you and making portfolio decisions.

Read: A short-term approach to long-term returns

NOTE: The 2014 Investor Insights Index survey was conducted in May and included 1,002 respondents who purchased or sold investments over the last 12 months. All currently held at least one investment product at that time.