A warning on Canadian banks

I don`t write about my native Canada very much, but the last few weeks of December is usually a time for getting together with friends and financial professionals. During such occasions, the discussion often turn to the markets.One of the topics of discussion this year was the outlook for the Canadian market and, in particular, the banking sector. Canadian banks have been a favorite of individual investors in Canada, largely because of their dividend yield and their superior returns in the last few years. In a recent post, local fund manager Tom Bradley of Steadyhand Funds wrote about the growing level of investor complacency in this sector:I’m slow getting to this, but in the Report on Business a while ago John Heinzl addressed a common question from Canadian investors – ‘Why don’t I just have an all-bank portfolio?’The question is not a surprising one given how profitable our banks are, what a powerful presence they have in our economy and how well their stocks have done.



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