Topic: How To Invest

Hi Pat: I’d like your opinion on whether holding individual foreign stocks makes sense, or should I be looking at hedged ETFs on the TSX for my foreign content?

Article Excerpt

Our view is that virtually all Canadian investors should have 20% to 30% of their portfolios in the U.S. stocks we recommend in Wall Street Stock Forecaster. These investments can provide all the foreign exposure most investors need. If you do want to add more foreign content, you could buy individual stocks. But for most investors, directly investing in foreign stocks can add an extra layer of risk and expense. As well, timely and accurate information about overseas companies is not always available, and securities regulations vary widely between countries. It can also be hard for your broker to buy shares on foreign markets without paying a premium. Tax rules and restrictions on transferring funds between nations add further uncertainty and cost. We think one of the best ways to invest in foreign (non-U.S.) markets is through exchange traded funds (ETFs). You could add some of these ETFs in reasonable quantities: perhaps 10% of your holdings if you’re a conservative investor…