Online trading in financial markets took a U-turn last year as trading volumes in the worlds most liquid asset class were stagnant. With investor demand shifting away from high risk products, brokers were on the look out for their next ‘bait’ of clients. A survey by one of Canada’s leading banking groups, Bank of Montreal, has found that the future is bright for Canadian investors.
The BMO InvestorLine Study surveys 1,000 Canadians to understand their trading and investing habits online The study found that 65 per cent of Canadians say they will likely start investing on-line in the next five years. Moreover, more than 80 per cent of those between 18 and 34 years old expect to purchase, sell, manage and monitor their investments online by 2018.
“This survey helps shed further light that clients are increasingly looking for more control over their investments offering returns that are not subject to the stock markets and the health of one economy. Thanks to the emergence of the internet and savvy investors, they are quickly realizing the benefits and transparency offered by forex managed accounts. This gives them greater options, freedom and control over their futures”, said Michael Buchbinder, Head of Business Development at fxhelpers.com an on-line research and managed accounts provider.
In addition, the study found that around 20% of Canadians invest online. According to the World Federation of Exchanges monthly trading data, Canada’s Toronto Stock exchange is the 7th largest exchange in the world, in terms of market capitalisation. Retail participation in the countries stock market is relatively high, around 38% of the population, 13 million people invest in equities (according to data from the Toronto Stock exchange).
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The study also gives insight into the general online behaviour of Canadians other activities that Canadians do include;
- Reading the news (77 per cent)
- Personal banking (77 per cent)
- Keeping in touch with family and friends (75 per cent)
- Gaming (69 per cent)
- Hobbies (63 per cent)
- Shopping (61 per cent)
Viki Lazaris, President and CEO, BMO InvestorLine spoke about the results of the survey, she said, “Canadians clearly are comfortable and have a passion for being online, and the Internet is a growing part of their daily lives.”
Viki continues, “online investing is a natural extension of that, offering investors more control over their portfolios, the ability to monitor their investments 24/7 and access to extensive research and tools.”
Canada’s growing FX & CFD Markets
Countries with strong equity participation from individuals investor naturally expand their portfolio to include CFDs. UK based CMC Markets was one of the first major brokers to establish a physical presence in Canada. In its early days the broker was only authorised to deal with professional investors however the Canadian financial regulators have liberalised the rulings to accommodate retail investors. The Canadian market has evolved over the last few years with leading brokers such as FXCM and Gain Capital setting up.
The e-trading phenomena has been one of the key drivers of retail participation in financial markets, prior to electronic trading, investing was done via a broker and investors were restricted to the advice and guidance their broker gave. The explosion of the internet and investor confidence in their own decision making has been the major turning point in the world of investments. The BMO study gives hope to FX and CFD brokers about future growth markets.