Back in 2006, the Canadian Securities Administrators (CSA) commissioned a major piece of research. that looked at Canadian investors’ skills and knowledge and the levels of investment fraud in Canada. It was an illuminating study. We learned a great deal about our investing beliefs and our behaviour. For example, investors understood the importance of being informed investors, yet they fell short when it came to putting their knowledge into practice. The result was a more vulnerable investor to unsuitable or illegitimate investment opportunities.
This summer we conducted another investor index, surveying more than 6,000 Canadians. We found to our dismay that the number of Canadians with no savings at all had increased by 8% (from 28% to 35%). On the good news front, the numbers of Canadians falling victim to investment fraud hadn’t changed.
But here is where BC investors have to be alert. BC is way ahead of the pack (10% higher than the national average) when it comes being approached with an investment scam. Of further concern is the fact that British Columbians are the most likely to say they have an aggressive investment style, with 38% agreeing with this statement. This last point is consistent with our Eron Mortgage Study where we learned that of those scammed, many were overconfident men in their 50’s. In the Eron Mortgage debacle, over 3,000 investors lost more than $180 million.
These are just a few of the findings in what is a very important piece of research. There is a lot to learn about Canadian investors.
If I haven’t convinced you yet that HYIP’s (High Yield Investment Programs) are Ponzi schemes, then let me try again. The returns promised in these funds just aren’t possible. Here is an example. PanaMoney Technologies, Inc. claims to offer up to 2.8% per day for investments over $20,000US. With this example, you would have $120,800US […]
How to avoid online scams