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Canadians uncertain about their ability to withstand market volatility

Forty-two per cent of Canadians are hoping—but unsure—that they are prepared for unstable markets, according to a survey by Edward Jones

Mississauga – Sept. 13, 2016 – Even amongst recent bouts of market turbulence, Canadians are hoping they can weather the storm — but two-in-five Canadians (42%) aren’t sure they can withstand market volatility, according to recent poll findings from Edward Jones. Only 22 per cent of Canadians surveyed state they feel very confident they are prepared no matter what the markets bring.

“Markets, like the weather, can be unpredictable, but having a solid, long-term financial strategy in place is the best tool to help steer through cloudy days,” says Patrick French, principal of client financial strategies with Edward Jones. “If you’re concerned about the strength of your portfolio — and how your strategy suits your particular life stage — creating and regularly reviewing a written financial strategy with a financial professional is important to help ensure you are prepared for the best and worst of times.”

Feelings of uncertainty are prevalent across all age groups, as more than one-in-three (35%) respondents over the age of 18 say they are unsure of their capacity to brave uncertain markets. As comfort with market volatility may depend on an individual’s goals and current life situation, French offers the following tips for different life stages:

Early Investors. Younger professionals with no dependents and a longer workforce horizon may have a higher risk tolerance and not be as bothered by volatile markets. While none of the age groups surveyed were overly confident, Canadians between the ages of 18-34 appear more positive than those over 35, with 27 per cent stating they feel very confident no matter what the markets bring. While goals at this life stage may be centered around saving for a first car or home or vacations, it’s still important to start saving early. A small investment each month can add up over time or can act as an emergency fund if needed earlier.

Family life. When markets are shaky, it can be daunting to think about how to achieve one’s financial goals, especially for those with families. A mere 17 per cent of Canadians in the 35-54 age group expressed confidence in the face of market volatility. While it’s tempting to completely avoid investing in precarious times, keeping and regularly reviewing a long-term financial strategy can help you feel more secure. In fact, a 2014 study by the Financial Planning Standards Council found that those who engage in comprehensive planning report higher levels of emotional, financial and overall contentment than those who do not. Building a well-diversified, quality portfolio relative to a personalized financial strategy can help you to feel secure about staying invested.

Preparing for retirement. One of the most important factors to consider when planning for your “golden years” is how to maintain income in retirement. In the age group closest to retirement— Canadians over 55— fewer than one-in-four (23%) reported they are prepared to face unstable markets. For those concerned, it’s important to work with a financial professional.. The importance of having a strategy that evolves with your life stages cannot be stressed enough. As you move closer to retirement, begin thinking about how the portfolio you have built will generate sustainable income through retirement.

“The important thing to remember is that during down times, don’t get discouraged to the point that you opt out of the market,” says French.  “No one can really predict when a downturn will end or the markets will rally, but you don't want to be on the investment sidelines when they do. The biggest gains can occur in the early stages of an upward trend and if you're not investing or paying attention to your portfolio it could begin to stagnate or become unbalanced.”

This news release presents the findings of an online survey conducted among 1,007 adults from February 17-18. In order to qualify for this survey respondents had to be 18 years of age or older and reside in Canada.

About Edward Jones

Edward Jones is a full-service investment dealer with one of the largest branch networks in Canada. It is a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund, and a participating organization of the Toronto Stock Exchange.

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