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RRSP investing shows confidence: Analyst

With two weeks left to make a retirement contribution for 2010, an RRSP survey from RBC shows Canadians are investing with increased confidence in the markets, a sign of a greater sense of job security, according to one analyst.

With two weeks left to make a retirement contribution for 2010, an RRSP survey from RBC shows Canadians are investing with increased confidence in the markets, a sign of a greater sense of job security, according to one analyst.

“When the economy falters, people respond to that by keeping their money out of the markets,” said Lee Anne Davies, head of retirement strategies at RBC. “We are seeing that the confidence is coming back and people are starting to move back into stocks and back into equities.”

In 2008 and 2009, Canadians wanted immediate access to their “rainy day” savings because of decreased job security, Davies said. In 2010, an increase of seven per cent in planned contributions, most of which came from young contributors, and a decrease of five per cent in February contributors are indications of an increased sense of job security, she said.

Though the percentage of last-minute, one-time contributors has gone down, the numbers are still high at 30 per cent, she added. “I see how people get concerned,” she said, “but if they keep contributing a little bit every month or so, they will have the advantage of compounding over time.”

 
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