Markets are jittery and, naturally, so are investors. At a time like this, what should you do with your money? Canadian CEOs offered their advice last week in a web poll conducted by COMPAS Inc.
The 131 respondents to the survey are feeling pessimistic about the economy these days, for starters. Just under 50% of the CEOs said the Canadian economy will become “somewhat worse” in the next six months. Still, that’s down from 61% when COMPAS asked the same question on March 20.
Given that sentiment, the business leaders were more likely to recommend bonds and cash over stocks when asked for the investment advice they would give to a younger relative who had just inherited $100,000. In a July 2006 poll, 21% of the respondents recommended Canadian stocks, whereas only 16% of the CEOs felt the same way this time around. The portion of respondents pushing short-term cash investments, however, increased by five percentage points to 24%. Only 5% of CEOs suggested investing in U.S. stocks.
Respondents are also retrenching from the stock market when it comes to their own wealth. The proportion of personal investment in the stock market was 52% two years ago, versus 45% today.
Western Europe remains the safest place to put money, according to the poll, followed by the United States and India. China is losing favour. On a 100-point scale indicating the safety of each country for investments, China scored an average of 46 compared to 61 in July 2006.
The CEOs were also asked to provide open-ended investment advice. Many recommended buying real estate, gold and water. “Invest early, invest often,” wrote one. “In a bad economy, a buyer should be licking his lips.”
Another suggested keeping an eye out for innovative start-ups. “Keep away from the big boys. They depend too much on clout and not enough on new ideas,” wrote the respondent.
Yet another said to bolster RRSPs and RESPs first. “Then you can consider other forms of legal stock market gambling,” the CEO wrote.