A new WealthRocket survey reveals 3-in-10 Canadians are investing less due to the economic uncertainty over the past two years. Factors such as inflation and rising interest rates have prompted these cutbacks.
Drop in risk tolerance and investments
The economic turbulence of the past two years has 30% of Canadians investing less money. The same number (30%) also report a lower investment risk tolerance due to the COVID-19 pandemic, specifically.
“Fear tends to override rational thinking,” says David O’Leary, WealthRocket’s personal finance expert. “So people stop investing or sell their investments in times where it feels like there’s uncertainty. It’s definitely the wrong thing to do if you don’t need to.”
Top investment goals
55% of all respondents — whether they’re currently investing or plan to one day — say retirement savings is their top investment goal, followed by generating income and building wealth (both 43%), and purchasing a home (24%).
Younger Canadians tend to prioritize generating income and building wealth, whereas middle-aged and older Canadians tend to prioritize retirement savings.
Values-based investing more important to younger Canadians
Those 18-24 show the strongest support for socially responsible investing, with 50% saying investing according to their values is “very important.” This sentiment is less pronounced among Canadians 45+, hovering around 34%.
“There’s much more of an awareness now of how the companies we buy our products and services from have an impact on the world around,” says O’Leary. “Times have changed. So, you have to change your mindset, too, when it comes to investing.”
