Canadian investors believe market volatility is the 'new normal,': BMO study

TORONTO – A new bank study suggests that nearly three-quarters of Canadian investors believe big swings on stock markets are here to stay.

BMO Financial Group says 72 per cent of investors surveyed in their latest study believe this volatile investment environment is the new normal.

And 84 per cent of respondents said they have changed their investing behaviour to adapt to the new environment.

The Toronto Stock Exchange lost six per cent of its value in May alone as traders reacted to uncertainty surrounding whether financial woes in the eurozone will spark a global recession.

But 47 per cent of those asked by BMO said they believe these volatile times present good investment opportunities.

The online survey was conducted by Pollara with a random sample of 1,156 Canadian adults, between May 17 and May 22.

Since then, the S&P/TSX composite index — the main measure of Canada’s largest stock market — has risen and fallen by about 200 points.

Rajiv Silgardo, Co-CEO at BMO Global Asset Management agreed that market volatility will not disappear any time soon.

“Several factors lead us to conclude that volatility will continue to characterize the financial markets for the foreseeable future. These include ongoing pressures in the eurozone, higher inflation rates in China, tensions in the Middle East and a tentative U.S. economic recovery.”

More than half of the survey’s respondents, 56 per cent believe economic troubles in Europe, the Middle East and other parts of the world have negatively impacted their investments.