Key insights
- A Canadian investor recounts shifting investments from US (SCHD) to Canadian (VDY) markets, citing instability concerns. VDY significantly outperformed SCHD over the past year. While the post highlights potential tax advantages of Canadian dividends, it acknowledges luck played a role. The overall US market influence is slightly negative, reflecting a cautionary, albeit anecdotal, perspective on US market stability.
One year ago, I posted here about pulling 300k out of the US and dumped it into Canada. I had judged the US to be an unstable country, and regardless of returns, I don't invest heavily in unstable countries.
I cut my US exposure from 70% to 10%. From SCHD to VDY.
One year later, here is the performance update (including dividends, adjusted for currency fluctuations):
SCHD: 24.81% VDY: 52.90%!
For context, the S&P returned 28%.
Disclaimer: I got lucky. Obviously, I had no way of knowing that the US would underperform so horribly compared to the Canada, but I guess it's no surprise that unstable countries perform poorly.
As a added bonus, the sweet Canadian dividends are virtually tax free for me, compared to US dividends and their 15% withholding tax (that the US was threatening to increase to 50% last year).
So in conclusion, this worked out very well for me!