Nearly 40% of Canadians believe it will take more than three years for their retirement savings to recover the losses from the downturn, according to a recent poll commissioned by Edward Jones.

Of roughly 850 Canadians surveyed in May, another 31% said they expect it will take less than three years for their portfolios to recover.

Compared with the same poll conducted in the United States, the results reveal that Canadian investors are slightly more confident than their American counterparts.

Of nearly 700 Americans surveyed, 26% said they expect their retirement savings to recover the losses from the past year within the next three years. More than half of respondents said they expect the recovery to take more than three years.

Kate Warne, Canadian market strategist at Edward Jones, said investors should be taking steps to prepare for recovery.

“Now is the time for investors to review their current situation, reassess goals and take action,” she said.

Warne encourages investors to set up their portfolios to prepare for the future, not the recent past. Since stocks have historically provided higher returns than bonds or cash over periods of 10 years or more, she said now is the time to add equity investments through individual stocks or mutual funds.

Investors should also seek out tax-saving opportunities in the current environment. Since the severe stock market downturn may have deteriorated the value of investments in non-registered accounts, Warne said investors should consider selling to trigger a capital loss and use the proceeds to rebalance the portfolio.

Investors should also consider contributing to Registered Retirement Savings Plans, Tax Free Savings Accounts or Registered Education Savings Plans early to take advantage of the drop in stock prices, she said.

“This is the time for calm analysis, not fear and emotion,” added Warne. “History tells us that adding money to a diversified, quality equity portfolio now could enable you to reach your long-term financial goals sooner.”

IE