The Canadian Investment Landscape: It wasn't that long ago when . . .

In 1982, less than 9% of Canadians (11% in the U.S.) owned equities - either directly or indirectly through their pension funds. Today that number exceeds 50% and does not include the Canada Pension Plan which invests for us all.

As well, in the early 80s, more than 80% of Registered Retirement Savings Plans (RRSPs) were bank-sponsored Guaranteed Investment Certificates (GICs).

Everyone older than 40 remembers the pitch that became prevalent in the 80s: money invested in a GIC earns a negative return after adjusting for inflation; an investment in the world's equity markets would outperform these boring bank products and reward investors for their increased risk with substantially higher returns. As interest rates began to fall, a greater proportion of these assets began to shift into equity markets - primarily mutual funds.

It is interesting to note that one of the safest financial products, the Government of Canada Bond, outperformed the S&P/TSX Composite Index (equity) investment return during the same 10 year period 1994-2003.