Posthaste: Canadians putting their investments at risk with bad case of 'home bias'

Canadians should significantly reduce the share of local equities in portfolios, investing giant Vanguard suggests in a new report. Read on.

The report, released on July 11, found that home-based stocks represented 52.2 per cent of the average Canadian portfolio. The optimal portfolio breakdown is 30 per cent Canadian stocks and 70 per cent international, meaning the average Canadian investor who wants to shake up their holdings has some work to do to get the mix right.

Hasanjee acknowledged there are good reasons to be overweight the home team, among them tax considerations, currency hedging and “preference for the familiar.”Article content However, Vanguard said the average Canadian portfolio tended to be over-concentrated by security and sector. “Canadian investors are exposed to a considerable amount of risk that could have been diversified away,” Hasanjee said.

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