Talk:Canadian-US investing differences

From finiki, the Canadian financial wiki

Article title

Would a better title be "Investment differences between Canada and the USA"? --Peculiar Investor 21:38, 14 May 2012 (MDT)

Perhaps, but you will note it is already too long for good alignment in the sidebar. Briefer would also be better. --Shakespeare 21:43, 14 May 2012 (MDT)
Canada-US Investment Differences may work.--Shakespeare 21:52, 14 May 2012 (MDT)
Doesn't the sidebar make the necessary adjustments? See http://www.finiki.org/wiki/Pension_Plans, in particular the last bullet in the sidebar. --Peculiar Investor 22:04, 14 May 2012 (MDT)
It adjusts but does not look neat. Investing differences, not investment, I think. Perhaps "Canadian-US Investing Differences".--Shakespeare 22:15, 14 May 2012 (MDT)

Nortel effect

The changes in http://www.finiki.org/index.php?title=Canadian-US_Investing_Differences&oldid=4193 capture the historical fact that under the old TSE 300 index index methodology, Nortel was allowed to become significantly overweight in the index. In May 2002, the TSE 300 index was replaced by the S&P/TSX Composite Index, which specifically addresses the Nortel effect, "To ensure that no single company dominates trading, they are capped at a maximum of 15% for value, volume and transactions." Would suggest that this edit be removed. --Peculiar Investor 16:03, 29 May 2012 (MDT)

The concern remains that a single stock can be heavily weighted. Suggest you edit the three places this quote appears to indicate the current cap: the fact remains that the TSX is a relatively undiversified index.--Shakespeare 16:47, 29 May 2012 (MDT)
The S&P 500 methodology allows for "If any company has a weight greater than 19%, that company has its weight capped at 19%. The cap is set to 19% to allow for a 1% buffer", so probably isn't worthy of including when comparing Canadian-US Investing differences. Absolutely agree that S&P/TSX Index is not sector diverse, with the heavy weights in Finance, Energy and Mining -- as indicated in the finiki article. --Peculiar Investor 18:23, 29 May 2012 (MDT)

But it's easier to reach that cap in Canada because of the much smaller market. Reaching 19% in the US in the 500 is extremely unlikely; Apple is 4% today. So the poorer individual diversification, as well as the poorer sector diversification, remains a difference in the Canadian market. --Shakespeare 18:34, 29 May 2012 (MDT)

Added: one way to view this is that the TSX is not only less broad it is less deep. The dimensionality is different in two directions, not one.--Shakespeare 18:38, 29 May 2012 (MDT)

Basis for comparison, is it apples-to-apples?

Is the comparison of Canada's stock market, represented by the S&P/TSX Composite versus the US market, represented by the S&P Total Market Index, an apples-to-apples comparison? It doesn't impact the conclusion that the Canadian market is significantly smaller and is more concentrated that the US market. From their respective methodology documents:

  • The S&P Total Market Index includes all eligible U.S. common equities listed on the NYSE (including NYSE Arca), the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Select Market and the NASDAQ Capital Market.
  • The S&P/TSX Composite is the headline index and the principal broad market measure for the Canadian equity markets.

There are clearly more common equities listed on the TSX than are included in the S&P/TSX Composite. Canadian Stock Market Research: Stock Market Information, Prices and Daily Trends | Today's Market Activity shows 1,872 issues traded on December 7, 2012. --Peculiar Investor 06:40, 10 December 2012 (MST)

De-emphasizing Canadian stocks

My rationale for moving the Canadian stocks section from the first sub-heading to a later sub-heading is gearing the article more towards the less experienced investor. Hitting them with the details for the Canadian stock market doesn't seem as important in the context of US investing literature than understanding how to "translate" from 401k, Roth IRA and 529 plan into their Canadian tax efficient equivalent. --Peculiar Investor 08:43, 6 December 2015 (MST)

Tax sections consolidated

I have consolidated sections related to taxation, which simplifies the page organization and is easier to read. --LadyGeek 10:39, 6 December 2015 (MST)

Higher stock returns in the US?

The article contains the sentence "Canadian stock market returns have generally been lower than the US, but bond returns have been higher", with no source. It might be possible to find a source for this statement, but even if it was true in the past, it can't be used to predict the future. Reading this statement may encourage some readers (who don't necessarily understand that the past may not repeat itself) to overweigh US stocks in the hope of catching this extra return. Should the statement be deleted?--Quebec 06:32, 20 March 2021 (MDT)

Reviewing the article history, this early (2012) page version is where the point was introduced. Perhaps reworking the statement with a reference to Periodic table of annual returns, Global diversification and Home country bias might be more helpful than just deleting the statement. --Peculiar Investor 08:13, 20 March 2021 (MDT)
Ok, I've added a warning note.--Quebec 09:19, 20 March 2021 (MDT)
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