The start of a new year is always chock full of predictions and prognostications. Economists, academics, even astrologers, fill the media with opinions on what to expect in the coming months. What will happen to the dollar? Will interest rates rise or stay the same? Will the housing market crash? Is this a good year for finding love, achieving career success, making our dreams come true?
Well don’t you think it’s about time someone asked what you think? That’s right, you. After all, what is the stock market, the housing market, and in fact, the overall economy - if not the sums of their many parts? And you dearest, are definitely a part. As an investor, your opinions, your emotions and your actions will actually determine where and how these things will go.
Investing in 2016
We were pleased to see that BMO Bank of Montreal took the time to do exactly this: they asked. In a survey conducted in December by Pollara, BMO checked in with Canadians to see what we think will happen in the stock market during 2016.
Happily, we are an optimistic bunch. Nearly half (48 percent) of us expect the value of our investment portfolio to increase in 2016. This is despite the fact that a little more than half (53 percent) of us think market volatility will remain the same or worsen. In other words, we expect more scary dips and more new highs and we are fully willing to ride all that out while keeping our eye on the prize and staying positive. Kind of a great attitude for life in general, don’t you think?
Of course, Canadians are also famously cautious, which is nothing new, according to BMO’s previous years of research. Half of us are checking our portfolios more often, which is practical and smart. Half of us are opening our minds to consider safer investments, such as GICs, which offer a secure and more predictable return.
So we are, as they say, cautiously optimistic. Which means our conclusions are not so very different from those of the economists and financial experts we see on TV or whose commentary we read online.
Canadians know best
Mr. Paul Taylor, the Senior Vice-President & Chief Investment Officer, Asset Allocation, of BMO Global Asset Management (Canada) confirms that Canadian investors are on the right track. According to Mr. Taylor, “Investors can expect good but not robust opportunities in equities in 2016 based on moderate global economic growth, supportive monetary and fiscal policy and reasonable equity valuations.”
Great cautiously optimistic minds really do think alike!
Furthermore, Mr. Taylor advises that a sound approach for the year ahead is to “Establish a long-term strategy that is consistent with personal objectives and constraints and is constructed to weather capital markets volatility.”
And it looks like that is exactly what wise Canadians are doing. Thirty-seven percent have GICs in our investment portfolios and 56 percent of us rely on professionals for financial advice. Given everyone’s expectations for a bumpy road ahead, 54 percent of us say we are feeling influenced by that volatility and 44 percent are consequently on the hunt for lower-risk solutions in our portfolios.
Pretty good instincts, don’t you think?
All this to say, you really do know more than you think you do. Mind you, a little helpful guidance from the professionals will give you the confidence of knowing you’re making the right decisions, especially during those tough market moments. BMO investment professionals invite you to get in touch so they can help you bring clarity to your investment options.
Remember, each one of us is part of that sum. As you go, so goes the nation!
Learn more about the BMO Bank of Montreal 2016 Investor Sentiment report.