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Multimedia: Investing in Canada versus the world Add to ...

Canada’s stock market represents only about 3.4 per cent of the world’s $62-trillion (U.S.) in publicly traded companies. This is one reason money managers often advise Canadian investors to overcome their home-country bias and to put part of their assets abroad. Another goal is to diversify wealth and reduce the vulnerability of one’s portfolio to a collapse in the Canadian market. But a caution: There can be greater risk in investing outside our borders. Taxation is generally more favourable for domestic investments than foreign ones, and investing overseas adds currency-exchange risk. Plus, there’s the chance that Canadian investments will soar while overseas prices sink. Whether buying securities at home or abroad, investors need to do their homework beforehand, analyzing how a potential trade fits their overall strategy.

Market capitalization

The market value of companies in Canada, versus the market capitalization of stock markets globally, in trillions of U.S. dollars, as of Oct. 31, 2013.

SOURCE: World Federation of Exchanges (includes most stock markets)

Number of listed companies

The number of publicly listed companies in Canada, compared with stock markets globally.

SOURCE: World Federation of Exchanges (includes most stock markets)

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