Is Canada a good investment? Sure we get tax breaks on dividends from Canadian companies. These are worthwhile.
But most of our colleagues in the US don't buy Canadian stocks outside of their international holdings. I feel unpatriotic saying this, but we're really just another small country in terms of GDP. Our economy is small and poorly diversified compared to the United States. So are Canadian stocks worth buying aside from the dividend tax credits? Or are we better off diversifying between the US and the rest of the world?
And then I started wondering, well, if I were to avoid Canadian stocks, when does making geographic allocations become market timing? The Chinese economy has arguably the most growth potential in world for the next decade. If I'm going to avoid Canada because of our economy, then should I invest in China? Corruption in China adds risk to making Chinese investments...
Wikipedia
http://en.wikipedia.org/wiki/Stock_market says that the US stock market is about 34% of the world market capitalization. If I want to follow the 'just buy the market' philosophy, then I'd want my asset allocation to be about 34% VTSAX and 66% VTIAX. But most of the allocations I've seen on the forum are closer to 50-50 between these 2 funds. Alternatively, I could just focus on VTWSX which claims to do the allocation for me.
Does anyone have a good philosophy they'd like to share on this one?