The investing climate is anything but certain these days. Bulls and bears have plenty to debate, leaving the average investor overwhelmed with information. Now a group of Canadian CEOs is offering investing insights in a recent web poll conducted by Compas Inc.
The CEOs were asked how they would advise a young person keen to invest $500,000 received as part of an inheritance. The largest portion of the cash (20%) should be placed in Canadian public corporations or indexes, followed by 16% in real estate or rental housing, according to the respondents.
This is a drastic shift compared to October 2008, when Compas asked the same question. Stock markets had tanked as a result of the collapse of Lehman Brothers, and investors were defensive. At the time, respondents to the Compas poll recommended the biggest share of the portfolio go toward short-term cash investments (29%) and government bonds (17%).
Both investments are currently less favourable, according to the CEOs. In fact, government bonds received one of the smallest allotments at just 8%. Corporate bonds received the absolute lowest at 5%, compared to 4% in 2008.
Gold, which rocketed up in price during the recession, is still a worthwhile component of a portfolio. The CEOs suggested a 10% allotment for gold and precious metals, up from 6% in 2008. But when asked if gold is overvalued, their opinions skewed more toward overvaluation than fairly priced.
Some CEOs appear to have the same fears as every other investor, however. ‘If only I could see a week into the future,’ one wrote, ‘I wouldn’t have so many sleepless nights worrying about my finances.’