____ Posted Tuesday August 8, 2017 ____
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Chart of the Week

Canada: When Is It Our Turn Again?

by Michael Hayhoe

Below is an interesting chart showing the relative return of the US markets vs. the Canadian markets.

For the last 5 years our American cousins have hammered us! Their markets have more than doubled the performance of ours! What's up?

It's not too hard to figure it out. The US markets are dominated by large tech companies (think Apple, Amazon, Facebook, etc.) while here in Canada we are very resource heavy (Energy & Materials make up ~1/3rd of our index) and resources have been in a sustained bear market now for over 6 years. The last time we saw this dramatic an outperformance was in the late 90s leading up to the tech bubble of ‘99 where the outperformance briefly spiked to 150%. It wouldn't surprise me if we saw something similar again this time.

The question is what happened after? For the next decade, Canadian markets went on a sustained outperformance run. When, oh when, will that happen again? For me, it can't start soon enough!

Mike Hayhoe, BSc, CIM®, Branch Manager & Senior Investment Advisor | Independent Wealth Management Canaccord Genuity Wealth Management, Kitchener



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