Canadians are cuckoo for cash.
According to a new report from CIBC, we’re stacking a record $75 billion in Sir Robert Bordens under our metaphorical mattresses.
This collective hoarding of cash reserves could end up costing Canadians billions in lost investment returns according to CIBC, which would be more than happy to take the money off your hands. What the banks won’t tell you, of course, is that it could also save us billions in investment losses.
This recognition is the primary reason for holding onto money that would otherwise be invested in equities – nervousness over volatility in the markets has many Canadians reluctant trust anyone but themselves with their dollars.
“Consistent with past behaviour, Canadian investors have used current market volatility as an excuse to let cash pile up in their chequing and savings accounts,” said Benjamin Tal, deputy chief economist at CIBC World Markets and a co-author of the report.
Unsurprisingly, the study found that excess cash reserves have risen especially since the 2008 financial crisis. It’s unlikely that Canadians will feel encouraged to start investing again anytime soon given our economy’s perpetual state of what will happen next?’
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