Entering 2013, Canadian investors remain optimistic

Nearly eight in ten Canadians are confident about achieving their financial goals; debt reduction is the top finance-related New Year’s resolution for 2013

Waterloo, ON (Jan. 17, 2013) – As we begin a new year, results from the latest Manulife Financial Investor Sentiment Index released today indicate that, while Canadian investors appear to have ongoing concerns about the economic environment, they are taking deliberate steps to achieve their financial goals and they remain optimistic about their future financial position.

“The good news is that Canadians remain optimistic about their financial future and they are taking some very simple, but concrete steps to continue making progress on their financial goals,” said Paul Lorentz, Executive Vice-President, Investment and Insurance Solutions. “Canadians continue to be cautious about investing and with global economic challenges continuing to dominate our headlines, this is a trend we’ve been seeing for several quarters.”

Overall, the Manulife Financial Investor Sentiment Index, which measures Canadians’ perceptions about whether or not this is a good time to invest in a variety of savings and investment vehicles, showed that investor sentiment in Canada softened slightly through the second half of 2012. Results from the second half of the year show the Index now sitting at +20, down four points from July 2012 (+24) and down six points from December 2011 (+26).

“Canadians are now more focused on paying down debt which may be causing them to be more cautious about investing,” added Mr. Lorentz. “The slight decline returns the Index to the December 2010 level, however it is positive to see that investor sentiment continues to remain significantly stronger than during the height of the economic downturn in 2008-2009.”

Canadians optimistic about the future

Interest in investment and savings vehicles remains flat indicating a continued cautious outlook toward investing, however, Canadians say they are optimistic about their financial future. Currently almost eight in ten Canadians feel their financial position is either the same (43 per cent) or better (35 per cent) than it was two years ago. Optimism for the future is higher with more than 90 per cent of Canadians indicating that two years from now their financial position will be either the same (39 per cent) or better (53 per cent) than today.

Consistent with this optimistic view, 77 per cent of Canadians say they are either on track when it comes to their current financial goals (40 per cent), or they are behind but are likely to catch up (37 per cent).

Taking a conservative approach

The index reveals that, overall, Canadians are heeding the advice of the Minister of Finance and the Governor of the Bank of Canada to reduce consumer debt and they are taking a more conservative approach to help achieve their financial goals. Nearly 50 per cent of Canadians indicate they have taken steps to reduce their spending, with 31 per cent saying they are saving money on a regular basis.

Other ways that Canadians are taking greater control of their personal finances include: talking to a professional financial advisor for advice (22 per cent), working more or increasing their income (19 per cent), calculating how much they need to achieve their financial goal (17 per cent), and saving ‘found’ money like bonuses and tax refunds (14 per cent).

“It appears that Canadians are taking to heart the importance of having a balanced financial plan in place that includes a healthy focus on debt reduction and saving,” added Mr. Lorentz. “Trimming household budgets, paying down debt and saving for a rainy day are all important steps that will put Canadians in a better financial situation for their future.”

Top Financial New Year’s Resolution for 2013, by a huge margin

Nearly four in ten Canadians say “trimming the household budget” is their top 2013 financial New Year’s resolution. Next on the list were “creating a will or estate plan” and “creating an emergency fund,” both garnering 13 percent of responses.

Canadians say their top financial priority for 2013 is paying down debt or maintaining their current lifestyle. Paying down debt is the top financial priority for 31 per cent of respondents. Twenty-two per cent indicate that maintaining their current lifestyle is their financial priority for the year.

Key Regional Findings from the Manulife Financial Investor Sentiment Index:

  • Quebec residents (44%) are more likely to feel that they are ‘on track’ when it comes to their current financial goals, compared to BC (35%) and Ontario (38%).
  • Ontario residents (33 %) are more likely to select “pay down debt” as their top financial goal compared to Quebec (28%).
  • Atlantic residents (16%) are more likely to select ‘creating an emergency fund’ as their New Year’s resolution compared to all regions of the country except for BC and Alberta.
  • Residents of Manitoba and Saskatchewan are more likely to agree that it is a good time to invest in stocks compared to the rest of Canada except for BC and Alberta. They are also more likely to agree, along with Ontarians, that it is a good time to invest in Mutual Funds compared to BC and Quebec.
  • Quebec residents are least likely to say it is a good time to invest in their home.
  • Residents of Alberta and the Atlantic region are more likely to agree it is a good time to invest in property compared to BC, Ontario, Manitoba, Saskatchewan and Quebec.
  • Atlantic Canadians and Albertans are more likely to agree it is a good time to invest in cash compared to all other provinces.
  • Residents from Alberta are more likely to agree it is a good time to invest in TFSA’s compared to Ontario, Quebec and the Atlantic region.
  • Residents from BC and Quebec are less likely to agree it is a good time to invest in RRSP’s compared to the rest of Canada.

Visualizing Canadians' Approach to Personal Finances

About the Manulife Financial Investor Sentiment Index

The Manulife Financial Investor Sentiment Index is a semi-annual measure of investors’ views on a range of asset classes and savings and investment vehicles, as well as their confidence in these areas. The index is based on an online survey of 2,126 Canadians aged 25+ that was conducted between November 30 and December 11, 2012 by Research House, an Environics Company. The data was weighted according to the 2011 Canadian Census. A national probability sample of this size would have a margin of error of +/-2.1%, 19 times out of 20.

In 2012, some changes were made to the survey timing and methodology. The survey moved from a quarterly survey to a semi-annual survey. The survey methodology was changed to an online panel; prior surveys were conducted by telephone. Additionally, the survey’s sample size was increased from 1,000 participants to 2,126 in order to determine if any regional differences existed. The sample for the December 2012 survey included Canadians aged 25+; prior survey results were based on a sample of Canadians aged 18+. Historical comparison may be influenced by these changes.

About Manulife Financial

Manulife Financial is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Clients look to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions.

Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife Financial and its subsidiaries were C$515 billion (US$523 billion) as at September 30, 2012. The Company operates as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife Financial can be found on the Internet at manulife.com.