Investors regret decisions based on emotions

How do Canadians stack up when it comes to risk and decision-making for their investments? More than half have regretted an investment decision based on emotion, finds a survey conducted for Investor Education Fund (IEF) by The Brondesbury Group. However, most have only regretted their decisions once or twice.

Read: Leave emotion out of investing “We’re seeking to instill greater self-awareness of risk and how it affects your investments,” says IEF President Tom Hamza. “We want to stimulate Canadians to think about money, emotion and risk-taking.”

Additional findings from the survey include:

• Almost one-quarter of individuals who identify themselves as low-risk investors own “medium- to very high-risk” products; conversely, seven in 10 self-identified high-risk investors own “low- to medium-risk” products;
• One-in-three Canadian investors had a major loss (at least 20% of their investment value) in one year; and
• Of those who had a major loss, 51% stayed the course and didn’t change their investments in response.

Read: Harnessing emotion gives investors an edge

“Advisors get a new source of understanding about their clients and financial institutions get new insight into risk perception among Canadians,” adds Hamza. “If there’s one common message IEF would deliver to all of these audiences, it’s that Canadian investors should have more self-awareness about what influences sound decision-making.”

Staff

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