Canadian Stocks

Many of my favorite stocks are Canadian. Part of this comes from a natural resource bias which tends to hold it's value in inflationary periods, and part from the CAD itself, which has recently benefited from a resource-based economy and somewhat less profligate than usual fiscal policies.

Andrew recently commented on the Dow Jones Industrials page that he'd like to see a chart of Toronto Stocks priced in gold, and I thought that was a great idea.

Toronto stocks are somewhat more volatile than the S&P 500, but this can be a good thing, creating tradable bull markets that allow for a positive return in gold terms. The period from 2003 to 2007 was one example. While the S&P 500 fell 15%, the TSX rose by 72%. Even with that bull market though, a buy and hold strategy, while beating the S&P 500 since 2000, would have lost over 50% of your gold invested. Most investors are blissfully unaware of this loss, since over the same period, the TSX has risen more than 50% when measured in Canadian Dollars.

So the key is to be in the right stocks, at the right times – and to track your performance in gold, so you'll know when to buy and when to sell, to keep your wealth growing in gold terms.
Chart of the TSX from 2000 to present

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