BCSC launches investment calculators

The British Columbia Securities Commission (BCSC) has launched two investment calculators as part of Investor Education Month.

The return on investment (ROI) calculator and investment growth calculator are available on BCSC’s investor education website, the regulator said in a release.

The ROI calculator was created after a BCSC survey found people can find it hard to calculate a return on investment. Two questions—one relatively straightforward and one slightly more complicated—were asked in the online survey of 300 B.C. residents.

Of those surveyed, 86% “indicated a degree of comfort” with the concept of a return on investment at the beginning of the survey, the release said. The answers to the first question showed an overconfidence gap of 7%, with 79% of respondents answering the question correctly. The gap rose to 63% in the second question, with only 23% of respondents answering correctly.

“We are seeing from this data and our overall experience that investors need tools to help them understand important investing concepts,” said Pamela McDonald, director of communications and education at BCSC, in the release.

The investment calculator shows how investment contributions can grow over 20 years. Investors can choose a portfolio size and see how two different amounts grow.

The calculator uses a conservative rate of return to show how investing regularly increases savings over time by compounding returns, the release said.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.