For years, conventional financial wisdom has encouraged us to put our money to work. Build an emergency fund, invest for the future and let time and compounding do its thing. Not to say there’s something particularly wrong with that advice. Afterall, time in market always beats timing the market. But right now, a significant number of Canadians appear more comfortable keeping their money close. New research from Tangerine Wealth suggests nearly half of Canadians are holding back money they could otherwise be investing. Much of that money is sitting in chequing and savings accounts — and some Canadians are even keeping physical cash.
It’s a revealing snapshot of how economic uncertainty, the cost of living and market anxiety are changing our relationship with money. Aharon Kagedan, Managing Director, Wealth at Tangerine, says the hesitation itself isn’t particularly surprising. The amount of money some Canadians are keeping on the sidelines, however, is. “Almost one in four people who had money available set aside $25,000 or more,” Kagedan says. So, why are Canadians sitting on so much cash, and when does playing it safe potentially become a risk of its own?
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Cash is buying peace of mind
For many Canadians, keeping cash readily available isn’t necessarily about distrusting investments. It’s about flexibility. Tangerine Wealth’s research found that 45% of Canadians hesitant to invest felt they might need the money soon. In an environment where households continue to contend with high living costs and economic uncertainty, having money within reach can provide an important financial cushion.
“There’s absolutely nothing wrong with keeping cash on hand for short-term goals or as an emergency fund — I would say it’s a necessity,” Kagedan says. The issue arises when money intended for a goal decades away receives the same treatment as money earmarked for next month’s rent, a vacation or an unexpected car repair.
Cash may feel secure because it isn’t moving up and down alongside the stock market. But inflation can gradually reduce its purchasing power. Money sitting on the sidelines also doesn’t have the same opportunity to benefit from long-term investment growth and compounding. The challenge, then, is distinguishing between money you need to protect for today and money you’re trying to grow for tomorrow.
The new meaning of financial security
Financial security has never been exclusively about accumulating the largest investment portfolio possible. Kagedan argues that it involves balancing present-day stability with future financial progress. “You shouldn’t have to choose one over the other,” he says.
That balance is especially relevant when Canadians are juggling competing priorities. Travel, dining, wellness and other experiences remain meaningful parts of life, while housing, groceries and everyday necessities consume significant portions of household budgets. Although Tangerine’s survey didn’t specifically examine lifestyle spending categories, its finding that 45% of Canadians are reluctant to invest because they may need the money soon highlights the importance consumers are placing on liquidity.
The solution isn’t necessarily abandoning the things you enjoy to maximize your investment account. “You don’t have to give up travel, dining out or the experiences that matter to you,” Kagedan says. Instead, he recommends giving every dollar a purpose: money for regular expenses and leisure, an emergency reserve for the unexpected and consistent contributions toward longer-term goals.
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Ontario investors are particularly nervous
Investment anxiety isn’t evenly distributed across the country. According to the research, 23% of Ontario respondents identified losing money as their biggest concern, compared with 17% nationally and just 9%in British Columbia. The survey doesn’t establish exactly why Ontario respondents were more apprehensive. Kagedan points, however, to the province’s high housing and living costs and its manufacturing sector’s integration with the U.S. economy as potential sources of uncertainty, particularly amid CUSMA trade negotiations.
Across Canada, the concerns extend beyond simply losing money. 19% of respondents pointed to market volatility, while 12% felt markets were too high to invest. Put together, those anxieties can make waiting seem like the sensible move. The problem is that waiting for the perfect moment can become its own strategy — and not necessarily a successful one.
Waiting for the perfect market
Anyone who follows markets knows the temptation. Stocks climb, so you wait for prices to fall. Markets decline, and suddenly investing feels too risky. When conditions improve, you wonder whether you’ve already missed your opportunity. “The reality is that it’s incredibly difficult to consistently time the market,” Kagedan says.
Rather than viewing investing as one enormous financial decision, he suggests approaching it through smaller, regular contributions. Investing an amount you’re comfortable with on a consistent schedule can reduce the pressure of trying to identify the ideal entry point. It also gives money more time to potentially grow.
For someone with $25,000 sitting in a savings account, however, that doesn’t mean immediately moving the entire amount into investments. Kagedan says the first question should be simple: “What’s this money for?” Money needed within the next few months may appropriately remain accessible. Someone carrying high-interest debt may want to address that first. Income stability, upcoming life changes, investment timelines and tolerance for market fluctuations should all factor into the decision.
Your TFSA might not actually be invested
There’s another detail Canadians can easily overlook: opening a TFSA or RRSP doesn’t automatically mean your money is invested. A TFSA and RRSP are account types. Depending on how they are set up, the money held inside them can still remain in cash or savings products rather than investments.
That makes reviewing your accounts just as important as contributing to them. Kagedan recommends regularly checking where your money is held and whether it continues to align with your goals. From there, Canadians can consider automating savings or investment contributions and adjusting their approach as circumstances change. “Consistency and clarity are often more valuable than continually chasing the highest possible return,” he says.
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Younger Canadians want a roadmap
The research also points to a generational divide in what’s preventing Canadians from investing. Among respondents aged 18 to 24, 25% said they didn’t know what to invest in or where to start — more than twice the national average. Younger Canadians were also more likely to indicate that a clear financial roadmap would help.
Older Canadians face a different confidence problem. Among respondents between 55 and 65, 19% said they lacked confidence in their investing decisions. The findings suggest Canadians across generations may want to build financial security but require different forms of support to get there. Overall, 17% of Canadians said access to knowledgeable advice would encourage them to invest, while 16% wanted simpler, lower-effort ways to begin.
Doing nothing isn’t doing nothing
Perhaps the most important takeaway is that financial caution and financial inaction aren’t necessarily the same thing. Keeping an emergency fund readily accessible can be an essential part of a financial plan. Holding money for an upcoming purchase can make sense. And no investment comes without risk.
But assuming cash is entirely risk-free overlooks the gradual impact inflation can have on purchasing power. Looking through the remainder of 2026, Tangerine’s findings suggest Canadians aren’t necessarily rejecting investing. 48% said having more money available would encourage them to invest, while 24% wanted lower-risk options with better returns and 17% wanted knowledgeable advice.
For Canadians waiting on the sidelines, the answer may therefore be less about finding the perfect stock, predicting the market’s next move or chasing the highest possible return. It may start with something much simpler: deciding what each dollar is actually supposed to accomplish.
Feature image by Mikhail Nilov
