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Canadian investors relying on domestic markets to fund retirement, says poll

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Only 32 per cent of Canadians who hold stocks in their retirement portfolios plan to invest in markets outside of Canada, according to a poll from CIBC Asset Management by Leger.

The poll results also show that nearly half of investors surveyed (44 per cent) say their main objective is long-term growth, which underscores the need to diversify their portfolios.
 
According to the poll 68 per cent of Canadians plan to invest mainly in Canada, while 59 per cent of Canadians plan to invest primarily in GICs (or other guaranteed investments), savings accounts, bonds or bond funds. Just 35 per cent plan to invest mainly in stocks, or equity funds.
 
In addition, nearly half (48 per cent) of Canadians between the ages of 18-34 plan to invest in global equities or mutual funds, with that number declining sharply to 30 per cent for those between the ages of 35-44, a demographic that is typically in their primary wealth-building years.
 
"While the Canadian market is a solid base for investing, diversification is an important consideration for long-term investors," says Luc de la Durantaye, managing director, asset allocation and currency management at CIBC Asset Management. "There are 40,000 stocks that trade on global markets, versus less than a tenth of that on Canadian markets. Global stocks include world leaders in health care, technology and manufacturing. Diversifying a portfolio across geographic regions and sectors offers many opportunities that are not available domestically.
 
"Foreign currency exposure is also an important aspect of portfolio diversification. With a number of foreign currencies cheaper than the Canadian dollar at current levels, there's an opportunity of further gains for Canadian investors."
 
CIBC Asset Management recently issued its 2014 outlook, stating that flat commodity prices would likely see Canada's equity markets continue to underperform relative to certain international markets this year.

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