Canadian investors are a curious bunch, hungry for research and information. Whether making investment decisions and purchases themselves on line or using professional brokers or advisers, they increasingly are using the many resources available to help them make informed investment decisions.
Some recent research from BMO Bank of Montreal shows that Canadian investors understand the value of research. But perhaps surprisingly they still are tending to rely on the more traditional sources for investing information and advice despite the increasing popularity and adoption of social media.
Almost 90 per cent of Canadian online investors, for example, find that extensive research resources and educational tools help make them effective investment decisions. Half are looking for a wide range of investments, a variety of accounts and strong customer service support from their online brokerage.
Thirty six per cent of investors of all kinds say they rely on television and business news shows for information and advice. Thirty per cent rely on print editions of newspapers and magazines followed by online editions of newspapers and magazines, online investing service providers, online financial communities and forums, radio, Facebook, blogs, mobile investing apps, Twitter and Linked-in.
On average traditional media sources are trusted by 61 per cent of investors compared to only 24 per cent for social media. More than two thirds find TV news and business news shows the most trustworthy, more than half find print and online editions of newspapers and magazines trustworthy and 48 per cent find radio trustworthy.
This compares to only 21 per cent who find blogs trustworthy followed by Linked-in (20 per cent), Facebook (13 per cent) and Twitter (12 per cent).
Information and research is particularly important to the growing legion of Canadians who are taking control of their finances and investments online.
The value of do-it-yourself investments in Canada now is estimated to be about $200 billion and growing.
A recent BMO InvestorLine (BMOIL) study found that two thirds of Canadians say they are likely to be investing online in the next five years. Many of those are younger Canadians, with 81 per cent between the ages of 18 and 34 seeing themselves investing online in the next five years.
Investors of all ages considering investing online should do their research before choosing an online brokerage.
BMO suggests researching online brokerages in advance to determine the range of services such as resources, tools, the user interface and stock screeners. Look for brokerages that offer a wide range of tools and resources that also can help new investors learn about the world of online investing through demonstrations, seminars, webcasts, tutorials, analysts' reports and newsletters.
"Some brokerages would probably tell you that their clients use their data more than most firms instead of traditional resources," says Glenn Lacoste, president of Surviscor. "I would caution that each broker would love to think that the vast amount of money they spend on one-up, better-than-the-next-guy resources makes sense, but I would agree more with the BMOIL approach."
Regardless of how or who does your investing, the important thing is to make sure investment decisions are made with due diligence and are based on reliable information.
"Regardless of where you get your investing information, do your due diligence and ensure it's coming from a reliable source," says Vicki Lazaris, president and CEO of BMOIL.
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors
