New OSC study finds pandemic causing increased stress among investors

By The IJ Staff | August 20 2020 10:00AM

Photo: Freepik

COVID-19 has caused increased levels of stress to about half of investors, most have been in touch with their advisors and there have been some investors who have sold more than 20 per cent of their portfolios, according to a new survey by the Ontario Securities Commission (OSC).

“We are seeing increased retail investor participation in equity markets during the pandemic,” said Tyler Fleming, director of the Investor Office at the OSC. “The Ontario Securities Commission is closely monitoring retail investor experiences and behaviours during this time to support our investor protection mandate.”

Further studies to take place on impacts

The OSC conducted a survey of nearly 2,000 Canadians between March 30 and April 11, to help understand the retail investor experience in Canada. Given the unique point in time, the OSC asked investors about their actions and attitudes related to investing during the early stages of the COVID-19 pandemic. These findings will be used to inform further work to understand the impact of the pandemic on retail investors.

Among its findings:

  • Investment stress: 47 per cent of investors are experiencing increased levels of stress during the COVID-19 pandemic.

  • Holding investments: 85 per cent of investors have held all of their investments as a result of the COVID-19 pandemic.

  • Selling investments: Investors with low financial knowledge were the most likely to sell 20% or more of their investments as a result of the COVID-19 pandemic.

  • Working with an advisor: 81 per cent rated the advice they received from their advisor about investing during the COVID-19 pandemic positively.

  • Do-it-yourself investors: 60 per cent of self-directed investors do so in part because they enjoy managing their own investments.

  • Difficulty in understanding investments: 68 per cent of investors experience at least one challenge to understanding their investments.

  • Financial knowledge: 61 per cent of Canadian investors have medium financial knowledge, with 23 per cent having high financial knowledge.

  • Frauds and scams: 10 per cent of investors believe that they are likely to lose money to an investment fraud or scam and only two per cent reported that they have already lost money to a fraud or scam.

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