The Globe and Mail reports in its Saturday, Dec. 6, edition that Canada's
stock market may be a
chronic laggard. The Globe's David Berman writes that the S&P/TSX composite
index has dropped 4.2 per cent in the
past two weeks, including Thursday's
284-point plunge -- its worst
one-day decline in over a year.
Canadian Oil Sands,
a company that defines the sector,
has cut its dividend dramatically
in an effort to buttress its
balance sheet.
There are problems elsewhere,
too. Gold miners are suffering
from high expenses and lower
gold prices. Canadian banks are turning cautious
about their earnings outlook
for the upcoming year, due
to low interest rates and high consumer
debt levels.
Mr. Berman says longer-term
performance numbers suggest
the Canadian stock market
will challenge investor
patience. Canadian stocks are lagging
the gains in United States stocks in
2014, putting them on track for
their fourth straight year of underperformance.
The index is skewed toward
cyclical sectors that tend to rise
and fall with the business cycle,
rewarding nimble
investors who can time their
entries and exits but punishing
investors who prefer to buy and
hold.
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