Canadian investors like to believe that they invest based on research, not emotion, notes a new report from BMO Financial Group.

BMO released its second annual report on the psychology of investing, which finds that 71% of Canadians classify themselves as research focused investors, and just 7% admit to being driven by emotion. However, it also reports that only one third of investors say that they rely completely on research, and just 28% say that they are in control of their emotions at all times when investing.

“In an ideal world, we’d base all of our investing decisions solely on rationality and research. However, we’re only human so emotions can often cloud our judgment,” said Mike Malloy, regional manager at BMO Nesbitt Burns. “The key to being a successful investor is to be self-aware when making decisions, understand what your risk tolerance should be and have a solid grasp of the fundamentals of the investing option you’re considering along with the overall market climate.”

BMO also reports that when asked which regions they are most optimistic about from an investment perspective, 58% ranked Canadian markets first.

However, Malloy notes that this sense of optimism “is somewhat tempered by concerns over the recent decline in the loonie and unease about what the future has in store for interest rates.”

The survey is based on online interviews with a sample of 1,005 Canadians, 18 and older, conducted between January 24 and January 28. It has a margin of error of plus or minus 3.1 per cent, 19 times out of 20.