110: Home Bias in Investing | How Geography Impacts Decision Making

Understanding Home Bias and Risk in Canadian Investment PortfoliosIn this episode of Barenaked Money, hosts Josh Sheluk and Matthew Kempton explore the topic of 'home bias' in Canadian investment portfolios. Fresh from a vacation, Matt discusses a recent study that reveals the tendency of Canadian investors to invest heavily in local assets compared to their global counterparts. They delve into the reasons behind this bias, including familiarity and perceived safety, and highlight the risks and reduced diversification from over-concentration in the Canadian market. The discussion also covers the impact of tax benefits, currency considerations, and the importance of a globally diversified portfolio for improved risk management. The episode concludes with a call to embrace diversification to ensure long-term investment success.00:00 Introduction to Barenaked Money Podcast00:15 Introducing Today's Topic: Canadian Investment Bias00:57 Understanding Home Bias in Canadian Investments01:30 Tax Benefits and Risks of Home Bias03:02 The Importance of Diversification08:39 Sector Concentration and Market Risks17:07 Global vs. Canadian Bonds25:34 Final Thoughts and Investment Philosophy26:34 Conclusion and Disclaimer