Young Canadians Trust Intuition Over Analysis in Investing

A recent survey conducted by the Canadian Imperial Bank of Commerce reveals that nearly half of young Canadians are choosing to invest based on their instincts rather than data-driven analysis. This trend underscores a shift in investment behavior among younger demographics, particularly Gen-Z and millennials.

The survey indicates that 76 percent of Gen-Zers and 75 percent of millennials incorporate their personal values and intuition into their investment decisions. In contrast, the overall figure for all Canadians stands at 69 percent. Despite this reliance on personal instincts, confidence levels among younger investors remain low. Only 55 percent of individuals aged 18 to 34 report feeling confident about their investment choices, compared to 64 percent of those over 55.

According to Liz Enriquez, a financial educator and founder of Ambitious Adulting, this trend highlights a noteworthy blend of values and emotions in investment strategies among younger generations. “The challenge is turning that self-awareness into confidence,” Enriquez stated in a release.

Young Canadians are not only relying on their intuition but are also increasingly engaging with social media influencers—commonly referred to as “finfluencers”—for investment advice. A 2024 survey by Toronto-Dominion Bank found that 68 percent of Gen-Z investors actively participate in the market, the highest among any age demographic. The popularity of social media as an investment resource has surged, particularly following the rise of meme stocks which have attracted younger investors seeking accessible financial guidance. The Canadian Securities Administrators reported that 82 percent of investors aged 18 to 24 are following investment tips from social media platforms.

Despite the allure of social media advice, the Ontario Securities Commission cautions that the quality of information available online can vary significantly. Many “finfluencers” may not have the necessary qualifications or may be motivated by interests that do not align with their audience’s best outcomes.

The current climate of investing can induce anxiety, and this sentiment is reflected in the CIBC report, which notes that while 79 percent of Canadians feel confident managing their finances overall, only 58 percent express similar confidence when it comes to investing. This disparity suggests that the complexities of the market can be daunting, especially for younger investors.

Luka Marjanovic, managing director and head of CIBC Investor’s Edge, remarked, “Increasingly, investors are going with their gut, but relying solely on intuition can be difficult to stomach in today’s complex markets.” To help bolster confidence among young investors, CIBC has provided several recommendations:

– Understand your risk tolerance.
– Start small to build experience.
– Choose a straightforward investment platform.
– Seek out educational resources to enhance knowledge.

As more young Canadians navigate the investment landscape, balancing intuition with informed decision-making will be crucial for long-term success. The dialogue around personal finance continues to evolve, reflecting broader societal changes in how younger generations perceive and engage with financial markets.