BMO Financial Group

BMO Financial Group
BMO InvestorLine

BMO InvestorLine

September 18, 2013 06:00 ET

BMO InvestorLine Study: Canadians Cite "Investing Tips" as Top Reason for Making Changes to Their Portfolios

- Almost two-thirds of Canadian investors identify receiving investing tips and recommendations as the top reason for buying and selling

- Other key drivers include changes in interest rates and stock indexes, corporate news and global political developments

- The significant increase in the availability of financial news in recent years has not made Canadians more active traders

TORONTO, ONTARIO--(Marketwired - Sept. 18, 2013) - According to a new study released today by BMO InvestorLine, investing tips and recommendations are the most likely factors to prompt Canadian investors to make changes to their portfolios. The survey found that 65 per cent of Canadian investors said that getting a solid recommendation would cause them to buy and/or sell.

Other key factors identified by Canadians that would cause them to make changes to their investments include:

  • Changes in interest rates (63 per cent) and fluctuations in major stock indexes (50 per cent) and currencies (42 per cent).
  • Political/social unrest (44 per cent) and natural disasters (43 per cent).
  • Corporate news such as earnings and product launches (48 per cent) and allegations of corruption within a company (44 per cent).

"The investing environment is becoming increasingly complicated, especially when you consider how interconnected the world's financial markets are and the expanding number of investing options available to Canadians," said Viki Lazaris, President and CEO, BMO InvestorLine. "Therefore the premium Canadian investors place on receiving recommendations makes sense. However it's important to not rely solely on tips when making investment decisions. Investors should also seek sound advice."

"There's a growing number of investors out there who, while still wanting to have the final say with their investing decisions, want a co-pilot to help them manage their portfolios," noted Ms. Lazaris. "To help this group, BMO InvestorLine recently introduced adviceDirect, a first-of-its-kind service."

Launched in September 2012, adviceDirect acts as a virtual investment advisor. It provides specific buy and sell recommendations based on an investor profile that are tailored specifically for a client's goals, time frame and risk tolerance. The service continually monitors the client's portfolio and sends notifications with specific recommendations when their portfolio needs attention on areas like diversification, asset allocation, risk and equity ratings.

Canadians Blocking Out the Financial News Noise

The study also found that, despite the increase in financial news being provided by 24/7 business networks, online publications and social media sources, Canadians have not raised their trading frequency as a result. Only 14 per cent of investors reported that they trade more because of the increase in news they receive while 71 per cent state that it has had no impact on their trading frequency or style.

"While there's plenty of legitimate and useful information out there, there's also a lot of noise. It's encouraging that Canadians are not being swayed by the onslaught of financial news that we've seen in recent years," said Ms. Lazaris. "However, with this increase in available news it's easy to get overwhelmed. Therefore, it's important to continue to keep informed on what's important to you and your portfolio. A service like adviceDirect provides direction on what to pay attention to and when to act on it in order to help avoid issues or missed opportunities."

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The results cited in this report come from an online survey fielded by Pollara between July 26th and 30th, 2013 with a sample of 1,020 Canadians 18 years of age and older. Overall results for a probability sample of this size would be accurate to +/- 3.1%, 19 times out of 20.

BMO InvestorLine Inc. and BMO Ligne D'action Inc. provide this commentary to clients for informational purposes only. The information contained herein is based on sources that we believe to be reliable, but is not guaranteed by us, may be incomplete or may change without notice. The comments included in this document are general in nature, and professional advice regarding an individual's particular position should be obtained.
BMO InvestorLine Inc. is a member of BMO Financial Group.

® Registered trade-mark of Bank of Montreal, used under licence. BMO InvestorLine Inc. is a wholly owned subsidiary of Bank of Montreal Holdings Inc. Member - Canadian Investor Protection Fund and IIROC.

An adviceDirect account is a non-discretionary fee based account which offers investment recommendations. adviceDirect does not provide portfolio management by a portfolio manager. The client makes their own investment decisions and manages their own investment portfolio. adviceDirect does not offer discretionary, managed accounts.

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