Vancouver – As part of its Investor Education Month activities, the British Columbia Securities Commission (BCSC) is pleased to announce the launch of a Return on Investment Calculators and an Investment Growth Calculator on its investor education website, InvestRight.org.
The BCSC developed the ROI calculator after conducting survey research that demonstrated that the return on investment (ROI) calculation can be difficult for people to understand.
The BCSC conducted an online study of 300 B.C. residents’ understanding of ROI, asking survey respondents to make calculations based on two questions – a relatively straightforward question and a slightly more complicated one. The survey identified that an “overconfidence gap” significantly widened when respondents answered the more complicated question.
At the outset, the survey asked respondents about their comprehension of ROI, and 86 per cent of respondents indicated a degree of comfort with the concept.
When asked to calculate the first question, 79 per cent of respondents answered correctly – an overconfidence gap of seven per cent. Only 23 per cent of respondents answered the second question correctly, increasing the overconfidence gap significantly to 63 per cent.
“We are seeing from this data and our overall experience that investors need tools to help them understand important investing concepts,” said Pamela McDonald, BCSC Director of Communications and Education. “The launch of these two calculators and other improvements to InvestRight.org are part of our ongoing efforts to improve investing literacy in British Columbia so that investors can have the best investment outcomes.”
The new Investment Growth Calculator shows investors how investment contributions can grow over 20 years. Visitors to the website can choose a portfolio size and see how two different amounts grow. The calculator uses a conservative rate of return to demonstrate that investing on regular basis can increase savings over time through compounding returns.
These new calculators are two featured items in a suite of enhancements to InvestRight.org that enhance user experience, encourage more engagement on the website, and improve overall content presentation. InvestRight.org also features tools to help investors improve their investment fee knowledge, such as a Fee Calculator, on the Take a Look at Your Investment Fees.
About the British Columbia Securities Commission ( www.bcsc.bc.ca )
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital