Canadians believe another market correction is on the way and as such are looking for safer investments, according to a poll by Toronto-based Bank of Montreal (BMO) released on Monday.
Sixty-three percent of respondents to the BMO survey said they believe there will be a market correction in the next 10 years. British Columbians are the most pessimistic about the market with 67% of participants from that region expecting a correction compared with 58% of Albertans.
As a result half of the Canadian investors surveyed said they were looking for safe investment options, including guaranteed investment certificates (GIC). Twenty-seven percent of survey participants already own GICs while 32% said they are likely to purchase one in the coming year. Another 44% of respondents said they planned to buy GICs in the next five years.
In terms of which Canadians are more likely to own a GIC, BMO found that 36% of people living in the Prairies own GICs compared to 19% of Maritimers. Most Canadians (53%) said they purchased a GIC because it brought them peace of mind while 44% said the investment product made budgeting easier.
Furthermore, BMO’s survey found that grey-haired clients aren’t necessarily the investors looking for safety. Forty-three per cent of Canadians under 35 prefer safer investments, according to BMO, compared to 11% who said they prefer investments classified as risky.
Pollara Strategic Insights conducted the survey on behalf of BMO. Results were gathered from 1,023 online surveys completed by Canadians over the age of 18 between November 29, 2013 and December 5, 2013.