The last year-and-a-half has been a trying and confusing time for Canadians. Inflation has soared, leading the Bank of Canada to increase its policy interest rate 10 times since March 2022, to 5% as of the time of this writing. These rapid rate hikes hit those with variable-rate mortgages hardest, with many seeing their monthly payments rise significantly.
The stock market has also been volatile since the onset of the pandemic, with the market continuing to reflect rising inflation, which can affect a company’s potential earnings.
In a whirlwind of market volatility, it’s natural to be unsure of what your investing goals should be right now. Is it better to put money away for retirement, or save for a short-term goal like buying a car or taking that trip you’ve always dreamed about?
According to a recent WealthRocket survey of 1,200 Canadians ages 18 and older, 30% of Canadians are investing less due to the economic uncertainty of the last two years. And the same amount now have a lower risk tolerance since the start of the pandemic.
Even more telling, the investing goals of young Canadians ages 18 to 24 are a little all over the map, ranging from generating income (52%), to building wealth (51%), to purchasing a home (44%).
If you’re unsure of how to proceed with caution in the current market, reflecting on the financial milestones you hope to reach in the near or distant future is a good place to start.