The Toronto stock market hasn’t been winning any popularity contests of late.
Foreigners, in fact, sold the most Canadian equities on record last year based on net outflows, according to a BMO Capital Markets note this week. Meanwhile, domestic investors are often choosing to stay clear of the risks of the stock market and parking their investment dollars in cash, which is offering up some of the most attractive yields in decades.
It’s hard to blame them: over the past 12 months, the resource-heavy and growth-light S&P/TSX Composite Index has returned a mere 5 per cent – not including dividends – while the S&P 500 index boasts returns of 27 per cent.
To find some encouragement on that domestic stock market of ours, we can turn to Brian Belski, BMO’s chief investment strategist. He almost always has a bull case to make on the TSX, and this time he’s turning to those foreign outflows themselves as the possible catalyst.
He thinks…
