Competition reveals the risk tolerance of younger CanadiansBy Andrew Rickard | August 29 2016 09:45AM
A recent study has found that about half of young Canadians are risk-takers, while fewer than one in ten say they are risk averse.
More than 800 Canadian students between the ages of 18 and 22 took part in this year's Bridgehouse Scholarship Program. As part of the competition, they took investor personality quizzes and submitted essays which explained what they had learned about their own investment style. The program is meant to highlight the Know Your Client process that financial advisors are complete before creating an investment portfolios.
The results reveal that 62.5% of young Canadians are risk-takers, 51% are rational risk-takers, while only 9% self-identified as risk averse. Of the risk takers, 31.4% fell into the "Strategist" category, 20.3% were classified as "Thrill Seekers/Strategists", and 10.8% were placed in the "Thrill Seeker" category.
"Rational risk-taking, combined with a long-term investing horizon, is an ideal combination for successful investing. Young people have a long investing horizon. If they have a propensity for calculated risk, they can stay invested through the inevitable short-term ups and downs," says Bridgehouse Asset Managers president and COO Carol Lynde. "The Bridgehouse Scholarship Program was designed to help students get to know their potential strengths and weaknesses so that, when they start to invest, they can seek appropriate advice and support to invest successfully."
The ten scholarship winners each received a $2,000 award that is put towards their tuition costs. The winning essays can be found at bridgehousescholarship.com/winners/.