When it comes to making investment decisions, many Canadians admit to engaging the emotional right side of the brain rather than the logical left.
Two in five (40%) Canadians say emotions play a role in their investing decisions, says the latest BMO Psychology of Investing Report.
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“While we’re only human, wise investing means more than simply following your heart,” says Serge Pépin, vice president, investment strategy, BMO Asset Management Inc. “It’s critical not only to take the time to understand the market environment before making any financial moves, but also to ensure you’re in the right frame of mind to make such decisions.”
Reading the business pages of newspapers and magazines, doing research online and seeking advice from financial professionals can help to ensure an informed investment decision-making process, he adds.
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The report also finds that many Canadians are unaware of how to make an investment. Forty-four per cent of Canadians say that they are not confident when investing. Additionally, more than one-third (35%) are not familiar with the companies in which they have invested.
Forty-one per cent of those polled do not believe they are investing enough. The top barriers identified include:
- The vast majority (90%) feel they have not saved enough to warrant investing.
- Eighty-three per cent want to pay off their debt before investing.
- In addition, fear of losing what they invest (79%), feeling that investing is too complicated (76%) and not knowing who to turn to for advice (64%) were all identified as barriers.
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