episode: 84

Why Global Diversification is Good for Canadian Investors

October 4, 2023

listen now

The Benefits of Global Diversification

In today’s episode, we highlight the benefits of global diversification for Canadian investors. We highlight actionable strategies for Canadians looking to invest outside their home turf, making the once-challenging access to US and international markets more straightforward and affordable.

We start by reviewing the groundbreaking work by Henry Markowitz on modern portfolio theory, illuminating how diversification can help you gain better returns with less volatility. We discuss the Canadian investor tendency towards home bias in investments and discuss the merits of looking beyond national borders.

Wrapping up the episode, we point to a recent Vanguard report that outlines the ideal equity allocation for Canadian investors.

Join your hosts Keith & Marcelo as they guide you through this intricate yet vital topic, helping you craft a global investment strategy that’s well-rounded and research-based.

Global Diversification for Better Returns

Why Canadian investors should consider global diversification for better returns (1:46)
How diversification enhances returns while reducing risk (5:47)
Exploring the home bias among Canadians and its effect on their portfolios (13:13)
Global investors favor home markets; Americans least biased, Australians and Canadians most biased (16:48)
Assessing concentration risks in the Canadian equity market (20:41)
Analyzing Vanguard Report’s endorsement for global diversification in Canadian portfolios (22:54)
Review of Vanguard’s recommended global allocation for Canadian investors: 30% Canadian equity, 70% international (US, EAFE & Emerging Markets)
Why it’s easier than ever for Canadians to build globally diversified portfolios (26:53)

Mentioned in this Episode:

Meet your hosts

Keith Matthews

Partner & Portfolio Manager

Marcelo Taboada

Associate Portfolio Manager

Lawrence Greenberg

Associate Portfolio Manager

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at lawrence@tma-invest.com or 514-695-0096 ext.112 Follow Tulett, Matthews & Associates on social media on LinkedIn, Facebook, and more! Follow The Empowered Investor on Facebook, LinkedIn, and Instagram

Dive Deeper: Related Episodes

Happy Birthday! The Mutual Fund Structure Turns 100

Celebrate 100 years of mutual fund history, tracing their evolution from niche products to investment essentials. Explore their benefits: diversified exposure, easy access to foreign markets, and convenient trading. Confront their drawbacks: high fees, transparency issues, and sales-driven practices.

A Simple, Effective & Stress-Free Way to Invest in the Stock Market

Wondering how you can simplify your investment strategy without sacrificing returns? Tune in as Nicolas Bérubé, an award-winning financial journalist and author, discusses the benefits of a stress-free investment strategy.

Beyond Borders: Tax Implications for Non-Resident Canadians

Have you ever wondered what happens to your tax obligations when you leave Canada to become a non-resident? Join us as we shed light on the often misunderstood and overlooked aspects of taxation for non-residents.