Why Canadians invest too much at home
Patriotism doesn’t always pay off when building a diversified portfolio
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Patriotism doesn’t always pay off when building a diversified portfolio
READ: How a young couple can kill $142,000 in debt and start investingHolding on to too many Canadian stocks also means you’re missing out on gains elsewhere. If you only invested in the S&P/TSX Composite over the past five years, you’d be up 26%. America’s S&P 500 climbed by 70% over that time. It would be a shame to miss out on even some of those gains.
MORE: How to retire at 55 with $586,000Kirzner has about 20% of his equity portfolio in domestic stocks, 30% in U.S. companies and the rest in Europe and in emerging and frontier markets. Birenbaum’s balanced portfolio clients—who hold 50% in equities and 50% in fixed income—have 10% of their portfolio holdings in Canada, 23% in America and 17% internationally. On the fixed income side, she recommends holding 20% in Canadian bonds and 30% elsewhere. (Opinions on whether to hold fixed income outside of Canada are mixed. Kirzner says Canadian bonds are solid and there’s no reason to own others, while Birenbaum likes owning foreign corporate bonds, many of which come with higher yields than you can find here.)
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