The coronavirus pandemic is financially impacting generation Z, millennials, generation X and baby boomers differently.
Canadians from the millennial (22 per cent) and gen-X (25 per cent) cohorts were slightly more than two-times more likely than baby boomers (10 per cent) to have said the pandemic significantly set them back financially, according to a new survey of global individual investors for Natixis Investment Managers by CoreData. And nearly 10 per cent of millennials and gen-Xers said they were forced to take a withdrawal from their retirement plan versus just three per cent of baby boomers.
Globally, the survey polled 8,550 individual investors in 24 countries, including 1,050 in North America and 300 in Canada, in March and April 2021. Almost half (42 per cent) of Canadians said they made changes in their investing accounts as a result of the pandemic, including 15 per cent who said they invested more money. Others made withdrawals from savings and investment accounts (11 per cent) or decreased retirement plan contributions (six per cent).
Roughly 15 per cent of Canadians increased trading activity because of the coronavirus crisis. The survey found that both globally and in Canada, trading activity was highest among millennial investors, with a notable percentage trading more on their own through online platforms versus through a financial advisor.
Globally, 32 per cent of millennials — and 39 per cent in North America — said they increased their activity through online trading platforms since March 2020. And after seeing stock markets initially fall and then rise during the pandemic, 19 per cent said they’ve learned the importance of understanding risks in their portfolio and 20 per cent learned they need to avoid making emotional investment decisions.
Among all Canadian investors surveyed, 36 per cent said they’re stressed about their financial security, while 35 per cent have felt vulnerable and 34 per cent have felt even fearful since the onset of the global pandemic.
But the majority (69 per cent) of Canadian respondents said they’ve experienced no negative health or financial impacts. And when asked to describe how they felt about their financial security during the pandemic, many Canadians said they feel fortunate (84 per cent), resilient (76 per cent) and confident (66 per cent). However, the pandemic convinced 42 per cent of Canadians surveyed of the importance of keeping their spending in check, while 27 per cent said the coronavirus crisis has taught them the importance of having an emergency savings account.
Despite the uncertainty wrought by this once-in-a-century crisis, individual investors in Canada said they’re looking for 10.6 per cent returns above inflation on their investments this year, on top of average reported gains of 11 per cent in 2020. Long-term return expectations are 15 per cent higher than before the pandemic began and two-times more than the 5.1 per cent returns financial professionals said is realistic, according to a press release about the survey.
Nearly three-quarters (71 per cent) of respondents said they recognize sudden market swings of 10 per cent up or down as a normal occurrence and 69 per cent agreed that volatility can create opportunities to grow wealth. Yet 56 per cent said they aren’t comfortable taking risks to get ahead and, when push comes to shove, 78 per cent said they’d choose the safety of asset protection over investment performance. Volatility ranked second only to a slower-than-expected economic recovery as Canadians’ biggest immediate investment concern.