With interest rates on traditional savings accounts remaining low, a growing number of Canadians are asking a critical financial question: is it better to save or to invest? Pam McDonald, the Director of Communications and Education at the B.C. Securities Commission, highlights this dilemma as more people consider stocks, bonds, and other securities to grow their wealth.
Navigating a Complex Investment Landscape
The primary challenge for new market entrants is learning how to maneuver through a complex investment environment, a task that can be particularly daunting for those attempting a do-it-yourself approach. McDonald points out the array of available options, stating that investment accounts, RRSPs, TFSAs, RESPs, retirement income funds, first home savings accounts, and registered disability savings plans are all vehicles Canadians can use to enhance their financial portfolios.
The difficulty, for both novices and experienced investors alike, lies in selecting the right investment vehicle for their specific goals and risk tolerance.
The Fear Factor in Personal Investing
Colin Whelan of Innovative Research confirms that apprehension is a significant barrier. “People worry about getting it wrong, after all it is their money. Add in ‘do it yourself investing’, and it’s scary. Our polls show new investors are worried,” Whelan said. This fear underscores the volatile nature of financial markets and the personal risk involved.
Education as a Protective Shield
Both experts agree that knowledge is the best defense. “More than ever, investor education is a protective shield and it helps in achieving better financial results,” Whelan emphasized. Understanding the fundamentals of investing and the specifics of different account types is crucial for making informed decisions and safeguarding one's financial future.
McDonald and Whelan recently explored these themes in depth on the Conversations That Matter series, focusing on strategies for healthy and successful investing in an increasingly uncertain world. The full discussion is available for viewing.
The public is also invited to join the upcoming Conversations Live event on November 13, which will explore unlocking B.C.'s economy through innovative First Nations partnerships.
