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BMO Study: More than Three-Quarters of Canadian Investors Feel that Market Volatility is the "New Normal"

- Majority believe that balancing risk and the long-term rate of return are the most important things to consider in this market environment

- Eighty per cent report that they require help determining their risk tolerance and finding well-suited investments

- Eighty-six per cent say they would use an investment product designed specifically to maximize returns for their given risk level

TORONTO, ONTARIO--(Marketwired - Feb. 20, 2014) - According to a study issued today by BMO Global Asset Management, more than three-quarters (77 per cent) of Canadian investors feel that market volatility is the "new normal" and is here to stay for the foreseeable future.

When asked to identify their top priorities when deciding how to invest their money in the current market environment, almost all (96 per cent) said that balancing risk in their investments is critical. Other factors included:

  • The long-term rate of return (95 per cent)
  • Diversification (86 per cent)
  • Short-term rate of return (72 per cent)

"Factors such as stretched but still reasonable equity market valuations, the withdrawal of monetary policy support and ongoing liquidity strains in emerging markets lead us to believe that volatility will continue to characterize the financial markets for the next 12 to 24 months," said Paul Taylor, Chief Investment Officer, Fundamental Equities, BMO Global Asset Management.

Mr. Taylor noted that investors should be aware that returns are likely to moderate through 2014 and there will be further volatility in fixed income markets as the Fed's QE tapering program unfolds throughout the rest of this year.

"Navigating volatile markets can be challenging, so it's critical that Canadians seek out investing solutions that help them diversify their portfolios and effectively manage risk," said Robert Armstrong, Vice President and Head of Managed Solutions, BMO Global Asset Management.

Mr. Armstrong added that as an increasing number of Baby Boomers - defined as those born between 1945 and 1964 - approach retirement, it is important for them to focus on reducing risk and take a more conservative investing approach to preserve their nest egg.

Do Investors Need Help with Their Investments?

The study also examined if investors feel that they require help with selecting investments given current market conditions:

  • Eighty per cent said they could use assistance finding their ideal investment risk level.
  • Eighty-five per cent reported needing help finding investments well suited for their risk level.

Not surprisingly given these findings, 86 per cent stated that they would use an investment portfolio designed specifically to maximize returns for their given risk level.

Mr. Armstrong suggested that those who are seeking investment options to match their current age, life stage and risk tolerance should consider offerings such as BMO SelectTrust™ Portfolios or BMO ETF Portfolios. These fund solutions offer a series of six risk-differentiated options, including fixed income, security, conservative, balanced, growth and equity growth.

"It doesn't matter if investors are conservative, bold or somewhere in between, nor if they're approaching a key life event. There is a portfolio option available and tailored to their needs," concluded Mr. Armstrong.

Regional Breakdown:

Region % who feel that market volatility is the new normal and here to stay % who feel that balancing risk is an important investment factor % who say they could use help finding their ideal investment risk level % who say they could use help finding investments well suited for their risk level % who say they would use an investment portfolio designed specifically to maximize returns for their given risk level
National 77 96 80 85 86
Atlantic 80 96 77 82 86
Quebec 76 92 75 83 70
Ontario 78 97 80 86 91
Prairies 79 93 86 87 91
Alberta 73 99 79 86 93
B.C. 79 97 85 87 92

For more information on investing, please visit www.bmo.com/investments.

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The Pollara online survey was completed between January 31 and February 4, 2014 with a sample of 1,002 Canadian investors.

BMO Mutual Funds are offered by BMO Investments Inc., a financial services firm and separate legal entity from Bank of Montreal.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus of the mutual fund before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

BMO Global Asset Management comprises BMO Asset Management Inc., BMO Investments Inc., BMO Asset Management Corp. and BMO's specialized investment management firms.

®/™ is a registered trade-mark/trades-mark of Bank of Montreal, used under licence.

For further information:
Media contacts:
Amanda Robinson, Toronto
416-867-3996
amanda.robinson@bmo.com

Valerie Doucet, Montreal
514-877-8224
valerie.doucet@bmo.com

Laurie Grant, Vancouver
604-665-7596
laurie.grant@bmo.com