February 2006.  The Federal Finance Minister of Canada, Ralph Goodale scraped the foreign content limit for registered funds which caught even the mutual fund industry by surprise, so individuals are free to invest any or all of their RRSP or RRIF in foreign securities.

Should Canadians invest internationally?

The Advantages
International diversification offers three pluses.  It offers an individual to participate in the growth of economic sectors that do not exist in Canada.  Thousands of opportunities lie beyond our borders.  It offers exposure to rapidly growing markets including China, Brazil and India which are expected to outpace the G7 countries.  Finally, it offers above-average returns.  Should an individual plan to spend a significant part of their retirement years in the USA they would want to ensure that part of their assets are in US dollar investments so that their American purchasing power remains in tact should the loonie start to fall.  If they plan to spend time in France, Italy, Spain or the UK they should place part of their retirement money in euro-denominated securities or sterling-denominated securities.

The Disadvantages
Some of these markets can be volatile and currency risk can be a factor.  A young person can afford to ride out the tough times with a view to obtaining higher than average returns over a period of many years.

What are your retirement priorities?