The Home Bias Is Costing You More Than You Think
Most Canadian portfolios are not diversified. They are concentrated — by geography, by currency, and by structure.
WBN News Vancouver
Crystal Mirkazemi | WBN News – Vancouver | May 4, 2026 Editor: Karalee Greer Subscription to WBN and being a Contributor is Free.
There is a well-documented behavioural tendency among Canadian investors to overweight Canadian assets. It feels intuitive since you understand the companies, you know the currency, the tax treatment of Canadian dividends is favourable. This is called home bias, and in normal times it is a modest inefficiency. In a period of sustained monetary debasement, it becomes a structural liability.
Canada represents approximately 3% of global market capitalization. A portfolio that is 60 to 70% Canadian, which describes the average retail Canadian investor that is not a diversified portfolio. It is a concentrated bet on a mid-sized commodity-dependent economy with a currency under measurable pressure and equity markets heavily exposed to financials and energy.
The currency argument, plainly stated
Between 2020 and early 2026, the price of gold in Canadian dollars rose from approximately $2,750 to over $6,500 per ounce. The gold did not change. What changed was the purchasing power of the currency used to price it. A portfolio denominated entirely in Canadian dollars, held entirely in Canadian assets, offers no structural insulation from that erosion. It participates in it fully.
Global equity exposure particularly in U.S. dollars, euros, and other reserve currencies provides a natural hedge against CAD depreciation. When the Canadian dollar weakens, foreign-denominated holdings become worth more in domestic terms. This is not speculation. It is the mechanical consequence of holding assets outside a single currency regime.
Diversification is not just geography.
True diversification means exposure across asset classes that do not move together. Canadian equities are highly correlated with each other. Adding global equities reduces correlation. Adding real assets such as infrastructure, real estate investment trusts with global mandates, and commodities reduces it further. Adding alternatives, including managed futures, private credit, or gold itself, reduces it further still.
For accredited investors, private market access opens a dimension that public markets cannot replicate: income streams anchored to real assets, private lending at yields that reflect actual credit conditions, and infrastructure investments with inflation-linked revenue.
What balanced actually means
A genuinely balanced portfolio in the current environment is not 60% Canadian bonds and 40% Canadian equities. That combination delivered negative real returns through the 2021 to 2023 inflation surge and offered no protection from the currency erosion documented in the money supply data.
A more resilient allocation includes global equities across multiple geographies, a meaningful allocation to real assets, a reduced fixed income weight tilted toward short duration to limit rate sensitivity, and a deliberate exposure to assets that are structurally uncorrelated with Canadian monetary policy.
The question is not whether to diversify internationally. The question is why it took this long — and what it will cost to wait further.
Article #022
Crystal Mirkazemi | WBN News – Vancouver
My mission is to empower you to think big and build solutions for your family and business. Every milestone of life's journey is a chance to appreciate a financial plan. As I always say: Your most significant asset to be independent lies in your attitude towards money.
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Editor: Karalee Greer Subscription to WBN and being a Contributor is Free.
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