Few online investors feel their portfolios are well diversified
A vast majority of Canadian self-directed investors (81 per cent) say they use their online brokerage account for long-term investment goals such as saving for retirement or a child’s education, according to a recent RBC Direct Investing poll. Only a small proportion, (11 per cent) say they use their online brokerage accounts solely for short-term profit.
“We discovered through conversations with clients that the greatest demand is for portfolio management tools that help investors build and monitor their long-term investment portfolios,” said Jason Storsley, president and CEO, RBC Direct Investing. “While many investors have benefited from portfolio management services through traditional advice based channels, we have recently introduced new tools to help self-directed investors do the same thing on their own – set investment goals, build, manage and monitor their portfolios.”
Only one-in-five (19 per cent) online investors feel their portfolio is well diversified, with more women stating so (22 per cent) compared to men (17 per cent). Three-in-ten say they are not very diversified, not at all diversified or they don’t know. The survey also found that the more diversified the portfolio, the more likely investors are to say it has performed as well as (61 per cent) or better than (19 per cent) expected.
“It’s important to periodically re-evaluate your investment strategy and overall portfolio,” said Storsley. “One of our new tools helps investors determine whether their portfolio is well diversified and has the appropriate asset mix to meet their stated investment objectives. It also lets them see how changing their holdings affects their portfolio before they decide to buy or sell in the market.”
To support online investors in the management of their portfolios, RBC Direct Investing has introduced the following online tools:
- Goal setting – helps investors define short- and long-term goals and charts progress towards achieving these goals;
- Analyze & Rebalance – determines whether a portfolio has the appropriate asset mix to meet the stated investment objectives and illustrates how changes to holdings, using sample transactions, would affect a portfolio before trading in the market; and
- Performance – provides the ability to evaluate a portfolio’s historical rate of return and compare performance against various indices and standard risk-profile benchmark returns.
The RBC Online Brokerage Users study was conducted by Ipsos Reid between August 11 and August 17, 2010. This online survey of 631 Canadian online brokerage users, who personally traded in their online brokerage accounts and had been active in the preceding six months, was conducted via the Ipsos I-Say National Online Panel. No weighting of the final sample was done as it is assumed that the respondents are a random sample of Canadian online brokerage users. A survey with an unweighted probability sample of this size and a 100 per cent response rate would have an estimated margin of error of ±3.8 percentage points 19 times out of 20 of what the results would have been had the entire population of online brokerage users in Canada been polled.
About RBC Direct Investing
RBC Direct Investing, one of Canada’s leading online brokerages is a wholly owned subsidiary of Royal Bank of Canada. RBC Direct Investing provides innovative tools and resources to assist self-directed investors with building and managing portfolios to meet their long- and short-term investment goals. Clients have access to their investments 24/7 online or by phone and can choose from a broad range of investment products including stocks, bonds, exchange-traded funds (ETFs), GICs, T-bills and over 2,500 mutual funds. RBC Direct Investing Practice Accounts provide the opportunity to build a mock portfolio and gain experience with online investing without using real money. For more information about RBC Direct Investing visit our web site at http://www.rbcdirectinvesting.com/. RBC Direct Investing Inc. – Member Canadian Investor Protection Fund.
For further information:
Kathy Bevan, RBC, 416-974-1757
Suzanne Willers, RBC, 416-974-2727