Canadian Capitalist

TD Bank has released a report listing ten reasons why Canadians should invest in foreign equities. The report points out obvious reasons like better diversification, lower correlation with Canadian markets, attractive valuations etc.

The report also urges Canadians not to be deterred by the appreciation of the loonie over the past few years. A common refrain from investors these days is “the dollar could go higher”. It might, but the chances are the bulk of the upward move is already behind us. Foreign stocks are a bigger bargain now that our dollar is trading around 90¢ (US) instead of 65¢ just a few years back. Investors with a contrarian streak would also notice that fund companies are coming out with a number of currency neutral funds now (ironically, five out of ten newly launched funds from TD Bank are currency neutral!), instead of three years ago when the dollar was scraping bottom.

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