Paul Martin's Business Update - May 20th, 2014

Paul Martin's Business Update - May 20th, 2014

Six billion out, three billion in.

One type of transaction that does not get much attention – but most of us participate in – is foreign investment. Any of us with an RRSP or pension fund or simply just an investment account, probably has some foreign holdings in it. It’s all about diversification.

It also reflects on topics such as foreign ownership – how much of our economy is held in foreign hands and how much of the world’s economy do we own?

The latest figures on this particular account show us as being fairly aggressive. We invested $6 billion in stocks in March in foreign markets and another $1.5 billion in debt instruments such as bonds. Conversely, foreigners were lightening their Canadian portfolio. So, on a net basis, we are the foreign investors. Interestingly, we tended to invest in places other than the US as American stock markets performed better than others so we were finding bargains in other parts of the world. Similarly our stock market was in record territory which prompted profit taking rather than acquiring.

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