Experts Warn Thousands of Canadians Trading During Lockdown

Various platforms have reported a surge in trading this year. Wealthsimple Trade said new users increased by 80 per cent to 380,000 between July and December. Trading View reported it recorded an unprecedented 131 per cent jump in new users in March as COVID-19 lockdowns hit, and a 51.5 per cent increase in activity from existing users. Signups dipped in September but were back on the rise again by October.

Kevin Gu, senior product manager at Wealth simple Trade, said they had seen an incredible amount of growth on their platform that past year. He added that the pandemic had made active trading because people had more time on their hands since being at home, they were thinking about their finances more seriously, and they were excited about the opportunity to get into the market.

Besides, MacBeth, author of Investment Traps said the reality was, none of those people actually were able to hang on their investments. Obviously, MacBeth noted some people made some huge gains during the bubble. But inevitably, they gave it all back and more when the bubble burst.

Traders who do not invest are warned by the financial experts, that the might be caught up in “fear of missing out” on market highs. Even so Tracey Bissett, a Toronto-based chartered financial analyst, said that traders should not jump right to investing without doing the basics. She advised people to consider the timeline they’re saving for — going back to school or a down payment may be near-term goals that can be financed through a special RRSP lifelong learning or home buying plan.

At the same time, other goals like retirement may be farther out and require more of an invest-and-hold approach. Additionally, Bissett noted that investments like Bitcoin had gained popularity in the social media but she warned investors to be conscious of online influencers as some might not be knowledgeable.

Source: https://www.thestar.com/business/2020/12/17/as-thousands-of-canadians-flock-to-day-trading-during-lockdown-experts-urge-caution.html

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