Patriotism Isn’t a Portfolio Strategy
By Matthew Lloyd (Director of Operations)
Reviewed and approved by James McKnight (Founder & CEO, Registered Portfolio Manager) — “The Prophet of Profit”
“Let’s go to the top. When you are storming heaven, it’s God you must aim at.”
Honoré de Balzac, Père Goriot
America First? Why Your Portfolio Thinks So.
For years, financial advisors have pushed the idea that a significant portion of your portfolio should stay in Canadian stocks. But what’s the real cost of home-country bias?
The Numbers Don't Lie (They Just Have an American Accent)
Let's start with a reality check that might sting a bit: we’re proud Canadians, but if Canada were a U.S. state, we'd rank below Alabama (America’s fourth-poorest state) in GDP per capita (as of Sep 30, 2024).
Yes, you read that right—Alabama. Back in 2019 we were at least as wealthy as America’s ninth-poorest state (Montana). This slide from bad to worse paints a telling picture:
Source: The Economist
Proud but Poorer: A Canadian Reality Check
Defenders of Canada’s economic honor note that Americans work longer hours, that millions of undocumented immigrants aren’t included in official data, and that quality of life is difficult to measure.
Similarly, Cassandras south of the border never tire of predicting the decline of the American middle class. Strangely enough, they have a point—just not the one they’re trying to make:
Source: National Review
Beneath the chatter lies a stark truth: Canada is poorer than the U.S.—and the gap is growing.
Canada Built the Wonderbra. America Built Nvidia. Which Would You Invest In?
Canada has given the world some amazing innovations—insulin, the telephone, Wonderbra, and green onion cakes come to mind, but today’s economic growth is increasingly driven by technology giants. And where are these world-beating firms located? Not in Toronto or Vancouver, but in Silicon Valley.
Imagine the "Magnificent Seven" as a country. As of late August 2025, they’d boast a market cap of about $19.5 trillion—bigger than China’s entire economy (around $18.74 trillion) and quadruple Japan’s (about $4.2 trillion)!
The Productivity Puzzle
Here's a fact that’s not particularly fun: Canada's productivity growth has been moving at the speed of a maple syrup drip. The Business Council of British Columbia reports that,
Canada’s Half-Speed Economy
Between 1995 and 2023, U.S. productivity grew by 75 percent, while Canadian productivity grew 37 percent—half as much. And this productivity gap howls to be heard in our respective GDPs: from 2019 to 2024, the U.S. economy expanded by a virile 11%—compared to Canada’s flaccid 6%.
"But We're Resource Rich!" (And Other Bedtime Stories)
"But wait!" I hear you say, "What about our vast natural resources?" It's true—Canada is blessed with abundant natural wealth (enough to make us an appealing “51st State”). However, even in the energy game—where we once fancied ourselves the Gretzky of oil—the Americans are skating circles around us. They've increased their output by 25% in six years, while we're plodding along with a modest 11% gain—an energy production participation trophy, at best.
America celebrates its wildcatters, cheering “drill, baby, drill” all the way to becoming the largest crude producer in the world. Canada on the other hand vilifies its oil industry and blocks pipelines while slowly strangling its world-class oil sands.
Your Portfolio Deserves More Than a Kiddie Pool
If financial markets were swimming pools, the U.S. would be Olympic-sized: deep, expansive, and built for serious laps. Canada’s, on the other hand, would be an inflatable kiddie pool—fun for a quick splash, but hardly a place to break records.
And while we’re talking about size, consider that Canada represents a piddling 3% of global capital markets. So why do cookie-cutter strategies tell Canadians to park about 50% of their investments in Canadian securities? The received wisdom that Canadians should own Canadian stocks would make more sense if those stocks were top performers. But guess what? They aren’t:
Source: S&P Global
I wouldn’t be surprised if many readers with Big Bank advisors see 11.12% and think, “Wouldn’t that be nice!” And that’s before realizing that the S&P has achieved 15.25%* over the same 10-year period:
Source: S&P Global
Maybe it’s time to ask whether your portfolio is working hard for you—or for someone else.
*10-year annualized total return index, in Canadian dollars.
Reserve This: The Greenback Isn’t Going Anywhere
Yes, we know about currency risk. But here's the thing: the U.S. dollar has consistently been the world's reserve currency, and that isn’t likely to change any time soon. In fact, global uncertainty tends to strengthen the greenback, providing an additional cushion for American investments. The Federal Reserve recently stated that dollar dominance “has remained stable over the past 20 years.”
The World Isn’t Buying What the Yuan’s Selling
Where would you rather put your money? Russia? Nigeria? China? Hell no. You place your bets on the biggest and the strongest. The yuan’s share of international reserves has shrunk since 2022, and for those of you who spend too much time watching the TikTok intelligentsia predict crypto displacing the dollar, think again—and switch to cat videos.
Source: Federal Reserve
The Blockchain’s Favorite Currency Isn’t Bitcoin
Crypto is all too often a cess-pool of fraud, theft, and money laundering. This will change, and the “killer app” for crypto/blockchain lies in reducing the cost of global payments. Stablecoin transfers cost less than 1 cent, compared to $44 plus for a SWIFT international wire transfer, and amounted to $8.5 trillion across 1.1 billion transactions in Q2 2024. By comparison, Visa accounted for $3.9 trillion during the same period! And what currency do all these stablecoins hold to secure the value of their precious 1s and 0s? Drumroll…. THE MIGHTY USD:
Source: a16z crypto
Investing Without Illusions
Does this mean we're abandoning Canadian investments entirely? For growth, yes. The US market offers:
- Superior growth prospects
- Greater diversification
- Better liquidity
- World-leading innovation
- Stronger productivity growth
Our Growth Model Portfolio is U.S. only. Our Dividend Aristocrats Model Portfolio is Canadian only—Canadians do surprisingly well at dividends.
But What About Those Canadian Values?
Canada has a lot going for it: universal healthcare, beautiful landscapes, arguably the world's politest people—and we live here. But when it comes to growing your investment portfolio, nice guys sometimes finish... well, you know the rest.
GDP: Greatly Diminished Performance
Remember, in investing, as in hockey, you need to skate to where the puck is going, not where it's been. And where is Canada going? “The OECD projects that Canada will be the worst performing economy out of 38 advanced countries over the next forty years (2020-2060), achieving the lowest growth in real GDP per capita – the most important measure of overall prosperity.”
It’s Wall Street’s World—We’re Just Investing in It
Canada is a financial dud, and Wall Street's dominance isn't just a temporary trend–it's been building for over a century. Near the end of 2024, America's stock market made up 61% of global market capitalization. That's not just big; it's "buy-a-new-belt" big.
Source: The Economist
Performance Over Patriotism
As of July 16, 2025, the S&P/TSX Composite Index has delivered an annualized return of 11.12% over the past 10 years (including dividend reinvestment), compared to 15.25% for the S&P 500. By contrast, the Wealth Preservation Management Growth Model Portfolio has returned a CAGR of 18.15% from June 30, 2017, to December 31, 2025.*
*CAGR independently recalculated by DeVisser Gray LLP. Click here for their report. Return is shown in Canadian dollars, gross of WPM's 2% fee. Past performance doesn't guarantee future results. Investing involves risk, including the possibility of losing money. WPM was registered with the BCSC in March 2023, though the same portfolio manager, James McKnight, has managed the Growth Model Portfolio continuously since inception. Details on benchmark selection here. Details on performance calculations here.
Nationality should have nothing to do with your wallet. At Wealth Preservation Management we relentlessly pursue the highest returns for our clients, and that has led us to the United States.
Ka-ching, the check is in the mail.
