Albertans are feeling the pinch of the recent economic downturn, according to a recent survey from ATB Financial.
Forty-eight per cent of those attempting to save for retirement find themselves behind their goals, according to the survey.
“It’s been a really volatile year for global markets and that’s causing more fear than anything else,” said Steve Cook, branch manager and financial advisor with Raymond James in Cochrane. “But that shouldn’t derail a long term financial plan. The markets do fluctuate in the short term. In the long term, people are rewarded.
“Every negative has a silver lining. The lower stock market could be considered a positive – it gives people the opportunity to purchase investments.”
According to Cook, the downturn is an opportunity for those looking to invest.
“The best thing is to find a good financial planner who understands market velocity and psychology,” he said. “Fear is in human nature, unfortunately. (The trick) is to push through that fear and get good advice. Get a professional who can be like your personal trainer.”
Of the respondents surveyed, 67 per cent agreed the drop in oil prices had a “strong impact” on the province’s economy, while 45 per cent said they had been affected personally. Of those, 41 per cent said they’ve had salaries frozen or reduced, and 19 per cent said they had lost their jobs.
Cook said developing a plan for the future was essential, even during an economic downturn.
“There’s lots of ways to curb back (expenses),” he said. “If you don’t take care of yourself (first), you won’t be around to pay the (bills). You have to take care of yourself – no one is gonna take care of you for you.”
According to the survey, 61 per cent of Albertans affected by the downturn said they reduced their spending. Twenty-three per cent stopped regular savings, while 14 per cent withdrew some long-term savings and investments.
Derek Lalonde, a financial advisor with Edward Jones in Airdrie, said when it came to saving during a downturn, “the golden rule” was to pay yourself first.
“People know their budgets. They know what they can afford. If you don’t set aside money for yourself, it tends to go out (to other things),” he said. “If things really are that tight, when you’re finding income just coming in to have those primary expenses paid for, remember this won’t last forever.
“We all know that saving a dollar today allows it to compound and grow on itself. So by saving, you can save less today to have more money in the future. The longer you wait, the more you’ll have to save in the future.”
The ATB Investor Beat survey was conducted in October 2015 and included 1,024 respondents.
