Diversification and ETFs
Diversification and exchange-traded funds (ETFs)
Diversifying means spreading your money over many investments so one bad surprise only hits a small part. An ETF is a simple way to do it: a basket of investments you buy in one trade.
The 2026 numbers
- 3.2%
- Bonds: expected return per year
- 6.3%
- Canadian stocks: expected return per year
- 60%
- Huard & Co’s default stock shareHuard & Co default, and you can change it
Numbers checked against the official sources on September 28, 2026.
What it’s for
- Lowering the risk that one company, one sector or one country sinks your investments.
- Getting the “market” return at low cost, without picking stocks one by one.
Who it’s for
- Anyone investing, especially with small amounts: a single ETF can hold hundreds or even thousands of securities.
How it works
A stock is a share of a company; a bond is a loan to a government or a company. Stocks earn more over the long run, but their value swings much more.
An ETF (exchange-traded fund) holds a basket of securities and trades like a stock. Many track an index, for example large Canadian companies, and have low fees.
So-called “asset allocation” ETFs combine stocks and bonds from several countries in one product, rebalanced for you.
The more stocks, the higher the expected return and the deeper the drops can be. Huard & Co assumes 60% stocks and 40% bonds by default.
An example
What the 2026 guidelines expect, by category
Long-run averages before fees, not promises: any given year can look very different.
| Category | Per year |
|---|---|
| Cash, short term | 2.4% |
| Bonds | 3.2% |
| Canadian stocks | 6.3% |
| US stocks | 6.4% |
| International stocks | 6.6% |
| Emerging-market stocks | 7.5% |
A mix of 60% stocks and 40% bonds, minus fees, gives the 4.6% Huard & Co uses by default.
Fictional example, round numbers.
Common mistakes
- Putting a lot into your employer’s stock: your paycheque and your savings would depend on the same company.
- Buying whatever went up the most last year.
- Selling after a drop: that’s often what turns a temporary loss into a real one.
- Stacking several funds that hold the same securities and thinking you’re diversified.
In Huard & Co
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General information to help you understand, not personalized advice. Rules change: every number links to its official source.