Good morning.
Canada’s economic landscape is weighing on investors’ minds, with 55 per cent believing their pension plans have been affected by current economic conditions, according to a recent Bank of Nova Scotia report.
The Scotia Global Asset Management Investor Sentiment Survey, which interviewed 1,022 Canadians, found that 59 percent of them feel negative about their investments, up from 33 percent in the fall 2021 survey.
Investors’ top five perceived risks to their portfolios over the next few years were an economic recession (61 per cent), rising inflation (58 per cent), stock market volatility (46 per cent), rising interest rates (40 per cent) and global geopolitical risk (37 per cent).
One reason for all the anxiety is that only 26 percent have a written financial plan.
“These results indicate that investors have current concerns about meeting their retirement goals; however, regular meetings with financial advisors and having a written financial plan reduce these concerns,” said Neal Kerr, head of Scotia Global Asset Management, in a press release.
But there is also a stark contrast between how men and women feel about retirement.
A separate Bank of Montreal survey found that 52 percent of women are confident of retiring at their target age, compared to 68 percent of men.
The BMO Real Financial Progress Index, which interviewed 3,401 Canadians, also found that 73 per cent of women do not have a financial plan in place to achieve their goals, compared to 64 per cent of men.
“As the costs of inflation and the financial impact of the pandemic have significantly affected many women, it is understandable that they feel the need to rebuild their savings and feel less confident about retiring at the age they had planned,” Gayle Ramsay, head of everyday banking and customer growth at BMO, said in a press release.
In addition, 87 percent of women reported fear of unknown expenses, and 63 percent had anxiety about keeping up with their monthly bills.
“Financial planning and financial literacy are imperative when navigating finances to ensure clients make real financial progress,” Ramsay said. “Since most women report having no financial plan in place, they can begin to alleviate their anxiety and take control of their finances by evaluating their budgets, adjusting spending habits accordingly, and committing to a savings and retirement plan. “
Overall, only 74 percent of women said they feel in control of their finances, compared to 84 percent of men.
One reason is the gender gap in financial literacy that stems from childhood upbringing.
The study found little difference between how men and women are educated about personal finances from a young age: 61 percent of women said they did not have conversations with family members about budgeting or financial planning, compared to just 57 percent of men.
The gender pay gap is another contributor that affects the amount of money women can save and invest for retirement. In Canada, women earn an average of 89 cents for every dollar men earn, according to Statistics Canada.
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The European Central Bank raised interest rates by 50 basis points on Thursday as promised, ignoring financial market turmoil and calls from investors to scale back policy tightening, at least until sentiment stabilizes. In line with its oft-repeated guidance, the central bank for the 20 countries that share the euro raised its deposit rate to three percent, the highest level since late 2008, as inflation is seen to exceed its target of two percent until 2025. The ECB has raised interest rates by a combined 3.5 percentage points since July to combat a record rise in inflation, and more rate action remains likely as price growth proves far more stubborn than ever feared. – Reuters
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Prime Minister Justin Trudeau will make a housing announcement with Housing Minister Ahmed Hussen in Guelph, Ont.
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Alberta Premier Danielle Smith delivers a keynote address at the second annual Premier’s Summit on Fairness for Newcomers
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Transport Minister Omar Alghabra; Randeep Sarai, Liberal MP for Surrey-Newton; and Johnny Sangha, CEO of Global Agriculture Trans-Loading Inc., will make a funding announcement to strengthen British Columbia’s supply chain in Surrey
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Today’s data: Canadian Industrial Products and Commodity Price Indices, International Securities Transactions, Teranet-National Bank House Price Index; US Industrial Production and Capacity Utilization, University of Michigan Consumer Sentiment Index, Leading Indicators
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Earnings: Algonquin Power & Utilities Corp., Ballard Power Systems Inc.
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Today’s Posthaste was written by Noella Ovid with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.
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