A penny for your thoughts.
These days, given the copper coin’s demise, this figure of speech doesn’t really cut it — especially when financial companies are conducting surveys and collecting data to make sense of what investors, savers and everybody in between is thinking.
You can’t blame them for wanting to get inside our heads.
These insights offer opportunity to craft better services and products to help us (and them too).
Two new surveys speak to this corporate yearning.
First is a retirement poll by Mackenzie Investments called its Retirement Reality Check 2021.
It reveals 86 per cent of Canadians who can save for retirement are doing it.
Equally buoying: Most didn’t panic-sell in March 2020 (though perhaps we had other things on our mind: a scary virus and a ravenous need for toilet paper).
"The duration of the correction worked in people’s favour because it happened so quickly," says Ron Hanson, Winnipeg-based head of retirement at Mackenzie Investments.
The aforementioned deep slide in stock prices rebounded with near equal speed, so most people didn’t have time to get spooked and sell low.
Hanson adds it’s also likely most retirees and people investing for it learned from the 2008-09 crash.
"So perhaps people now know markets do recover."
Heartening findings aside, here’s one that’s a little less so.
About 80 per cent of those surveyed — 1,601 in all — are not confident when it comes to managing their investments.
Can you blame them?
Hanson points to growing volatility in stocks markets, probably near another peak and more poised for a historic correction each day.
Add in low interest rates leading to bonds and GICs no longer providing decent income, with a lack of decent workplace pension plans, and we’ve got a recipe for confusion and uncertainty, he says.
"How do you, as an investor and retiree, grapple with all that?"
That brings us to another report by TD Direct Investing, Canada’s most popular online, do-it-yourself trading platform.
The big bank used big data analytics to rummage through 1.7 million clients’ trading behaviour in late summer to get "perspective of how optimistic different segments… may be about the market," says Ted Paris, vice-president of Direct Investing at TD.
This method of surveying behaviour provides different insights than asking people what they think — which folks often self-edit.
But "if you want to know what somebody is thinking, just look at their Google search (history),’" Paris says.
"That’s what this sort of does; it looks at actual trading activity."
So what has this group of one million-plus DIYers been up to?
Based on their activity, they are sort of optimistic about investing heading into the fall.
"The sentiment scale is measured on an index that goes from minus 100, which is very bearish, to plus 100, which is very bullish, so the plus nine in August would indicate a sentiment of slightly bullish," says Anthony Okolie, a senior manager with TD Wealth.
TD’s investor army is collectively less optimistic than August 2020, when they scored 50.
The report also broke data into age groups and trading styles — daytraders versus buy-and-holders, for instance.
Another finding: long-term investors are more optimistic than traders. That’s a reversal from the last nine months. The reason?
"When we slice the data by age …we found the most optimistic age group last month was the oldest — who we define them as the traditionalists," he says, noting these investors were born between 1928 to 1945, and they tend to hold investments for a long time.
In contrast, investors under 50 — though not a majority — are chasing more risky investments, like meme stocks. Remember those? Namely, the entertainment company AMC and video game retailer GameStop were social media darlings earlier this year as average investors stuck it to hedge funds that had been betting against these firms, which were negatively affected by the pandemic.
Those rebellious retail investor strategies are still going.
But maybe, as the data show, not quite as strongly.
More broadly, what should we make of all these datapoints?
Okolie offers this take: "As an investor, it’s interesting to find out what other investors of the same age group — like gen Xers — are buying out East or in B.C, for example," he explains.
"It’s really two things for me."
One, it offers new ideas for investing. Second, it might validate existing ones.
Then again, maybe this is all too much, as the Mackenzie report seems to imply with its finding people aren’t sure what to do with their saved money.
Hanson suggests a simple solution: seek help.
"Research shows the value of advice," he says. "On average, a household is two times wealthier using an advisor than one that doesn’t."
But about half of Canadians don’t use one, the Mackenzie report also found.
If that’s you, there’s no time like today to talk to one.
Just educate yourself, says portfolio manager Justin Bender with PWL Capital in Toronto. He posts free videos on YouTube revealing how to keep things simple and cheap via index investing. This involves buying low-fee, diversified funds tracking the performance of indices like the TSX Composite. Even better, there are now asset allocation funds — "a gift to DIY investors," he says.
"Now, anyone with a brokerage account can invest in a low-cost, globally diversified, self-rebalancing portfolio in a single trade."
Don’t have an online trading account?
Try one of the many robo-advisers that offer something similar.
Because, regardless of what everyone else thinks, maybe you’d rather think about this stuff as little as possible.
And so, unsurprisingly the industry has services and products to suit you too.