Risk Parity Radio
Episode 395: Canadian Dilemmas, Total Market vs. Large Cap Growth, Gambling Problems And Portfolio Reviews As Of January 17, 2025
Jan 19, 2025
Discover the challenges that Canadian investors face when locating suitable index funds and the costs of currency conversion. Enjoy a lively debate about the differences between Tina Turner and Creedence Clearwater Revival. Explore effective strategies for accessing global markets using platforms like Interactive Brokers. Understand how large-cap funds relate to overall diversification and performance while critiquing common misconceptions in investment practices. Tune in for practical insights and a dash of musical nostalgia.
35:17
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Quick takeaways
- Investing in Canadian index funds poses unique challenges due to market size and currency conversion fees, emphasizing the need for strategic resource utilization.
- Understanding the correlation between large-cap growth and blend funds is crucial, as substituting these may not significantly impact overall portfolio performance.
Deep dives
Understanding Canadian Investment Challenges
Investing in Canadian index funds presents unique challenges due to the relatively small size of the Canadian equity market, which constitutes only about 3-4% of the global market. This situation can be frustrating for investors like Paul, who found that available Canadian equivalents for U.S. funds such as small-cap value funds are virtually non-existent. The talk emphasizes the importance of considering the overall cost-effectiveness of investing in U.S. funds, including understanding currency conversion fees that can be as high as 40%. A suggested solution includes utilizing resources like Portfolio Charts to explore available Canadian ETFs and even opening accounts with brokers that offer access to wider markets.
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