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Income Investors Struggling With Today's Low Interest Rates, Afraid To Adjust Portfolios

Stocks in this article: CM

Despite concerns about making their money last, many of today's income investors are sticking to low-yielding investments

TORONTO, Feb. 5, 2013 /CNW/ - A new CIBC (CM: TSX; NYSE) poll reveals that today's lower interest rates are taking a toll on investors who named income generation as their primary investment objective, with 42 per cent saying they are not satisfied with the returns they are currently generating in their portfolios. In fact, only 10 per cent are completely satisfied with their returns.

Key poll findings include:

  • Among those who stated that income generation was their primary investing goal, 42 per cent of this group say they are not satisfied with the income they are currently generating from their portfolio; in fact, only 10 per cent said they were completely satisfied.
  • Despite the concern, there is strong resistance to change with 54 per cent of income investors in low-yielding products saying they are not considering moving funds, with 52 per cent of that group citing "too risky" as the reason.

Fear Prevents Investors from Changing their Approach

"The fact of the matter is that fear is driving the decisions of many investors," said Steve Geist, President, CIBC Asset Management. "As a result, they have stopped taking an objective look at their investment options and are simply parking their money in low-yielding products - but ones that often guarantee a return that's less than inflation. In this new economic reality, Canadians need to review their portfolios for investments that will generate the income or return needed to meet retirement goals."

"When you combine this extended period of rock-bottom interest rates with the fact that people are living longer after they retire, you reach a point where you need to consider a new investment path," said Mr. Geist. "The good news is that there are investment strategies and solutions that can help, and by working with an advisor you can find that right balance."

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