The Canadian equity market is highly concentrated. Just four sectors – financials, materials, industrial and energy account for about 70% of the market. As with investors in any other country it is wise for Canadian investors to not hold all their assets in the domestic stocks and instead diversify across other sectors in foreign countries. …
Continue reading ‘Why Canadian Investors Should Diversify Globally’ »
Dividends are important part of a total return of an equity investment. The contribution of dividends to the overall total return cannot be under-estimated. Even if the dividend yields are small over time returns will be amplified many times over due to the power of compounding and dividend reinvestment. As with other equity markets, dividends …
Continue reading ‘On The Importance of Dividends in the Long-Term Returns of Canadian Stocks’ »
The historical annual returns of Canada’s benchmark S&P/TSX Composite index from 1924 to 2019 are shown in the pyramid chart below. Canadian stocks yielded a positive return in about 73% of the time. So in the long run, stocks tend to offer positive returns despite crises such as the dot-com crash, financial crisis of 2008-09, etc. …
Continue reading ‘Canada S&P/TSX Composite Index Historical Annual Returns 1924 To 2019: Chart’ »
The S&P/TSX Composite Index is down about 26% year-to-date. However it was down much before the 19% jump in the index in 3 days last week. The index reach a peak of 17,970 in Feb. Then it plunged dramatically in just a few weeks all the way to 11,172. This was the worst sharp decline in …
Continue reading ‘Comparing Canada Stock Market’s COVID-19 Crash To Past Routs’ »
The economy of Canada is mainly natural resources based whereas the US economy is well diversified. Accordingly materials and energy are two of the major sectors in the benchmark TSX Index. The following chart shows the total returns and sector weights in the benchmark index of Canada and the US: Click to enlarge Note: …