Canadians have some studying to do when it comes to their financial
literacy, as shown by the results of an Investor Knowledge Quiz by Bridgehouse
Asset Managers.
The survey tested investor’s understanding of common terms and
strategies; including the difference between equities and bonds, active and
passive investing, and the concept of dollar cost averaging.
The company reported out of 1004 participants, not one
person got a perfect score; the average was 39%, or 6 out of 15 questions.
Survey Results:
-While most of the Canadians surveyed knew the
definitions of both equities (70%) and bonds (71%), not many knew that
different types of investment income are taxed at different rates: 43% knew
that interest income is taxed at the highest rate, while only 24% knew that
capital gains were taxed at the lowest rate.
-Most investors surveyed didn’t know Canada’s
relative size in the global equity market: 27% underestimated its size, 27%
overestimated its size and 23% have no idea what size it is.
-Only 37% got the definition of dollar cost
averaging right.
-More than 62% didn’t know the difference between
active and passive investing.
-And, more than 82% believe there are still foreign
content limits imposed on their RRSPs.
However, although scoring poorly, most of the participants
(72%) did note they would like to learn more about investing and how to manage
their finances more effectively.
Furthermore, 93% would like the education system to include courses on
basic investing and financial principles.
Test yourself; a version of the survey is available as a
multiple-choice quiz HERE.
If you don’t score as well as you would like; not to worry,
that is why you have me!
Have a great weekend,
Tracey
Source: Original
article posted on Advisor.ca 11-27-13 by staff.
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