Maligned as the Canadian stock market is these days, investors own too much of it.
Investing giant Vanguard found in a recent study that just more than 50 per cent of the stock market exposure in Canadian investor portfolios is allocated domestically. That’s down from 67 per cent in 2012, a significant improvement. But Vanguard thinks Canadians are still putting their portfolios at risk through their home bias.
If you live, work and plan to retire in this country, investing in Canadian stocks is the right thing to do. But it’s never been harder to decide on the right mix of domestic, U.S. and international stocks. The U.S. market seems invincible, and stock markets outside North America have also delivered. Oh, Canada. How much of your underperformance should investors tolerate?
Vanguard says that overweighting Canada can add volatility, or sharp ups and downs. Another issue is the lumps sector mix in Canada. Four sectors –…
