The product specialist on CC&L’s Fundamental Equity team said there are short-term cyclical challenges on the horizon, but Canada’s equity market looks well positioned to meet those challenges.
“Canada looks very cheap on an absolute basis, as well as on a relative basis compared to the United States,” she said. “If you go back to the ’60s, using price to earnings ratio, Canada has only looked this cheap a couple of other times.”
And while inflation is expected to continue easing over the short term, structural pressures — from deglobalization to fiscal excess to geopolitical conflicts — could surprise markets by pushing inflation higher. In the coming business cycle, she said, Canada’s higher-than-average reliance on resources should serve it well.
“In a higher-inflation environment, hard assets, including commodities, typically outperform,” she said. “These tangible assets are a good store…
