S&P Is Reaching Record Highs, But The TSX Venture Is Where The Money’s At!

Palisade Research May 23, 2017
Category: Research

Since inception, the S&P 500 has shown steady growth. In fact, if you had bought the index in January 1950 and held until now, your investment would be up a cool 14,000%. Compare that to the TSX Venture, where a buy and hold strategy since inception in 1990 would have yielded a return of -7.0%. The reason for this difference is the absolute cyclicality of resource market versus general equities.

Since 2011, the S&P has plowed ahead, while the TSX Venture became mired in its worst and longest bear market. The S&P has gained 61% at a time while the Venture gave up a staggering 77%. Ouch!

 

However, since the resource markets began to rebound in 2016, the dynamics have altered.

The TSX Venture has outperformed the S&P 500 for the past 18 months in dramatic fashion, posting a 71% gain while the S&P rose just 21%. What’s at play? General equity growth may be slowing. However the real factor here is the strength of cyclicality in a resource bull market.

Resource investors continually dwell on the never-ending bull market in the S&P – we have been quite vocal on the topic. The data outlined above puts a new perspective on things, a reminder that we are in a bull market and as the title of this article suggests, “The S&P is reaching record highs, but the TSX-V is where the money’s at!”

Did You Like What You Read? Get Our Free Exclusive Content
Enter your email below and you'll receive our 'Weekly Palisade Newsletter' covering Contrarian Ideas and Macro-Situations that the mainstream financial media ignores. You'll also get our Top Investment Ideas and Asymmetric Trading Opportunities right when we find them...
Don't worry - we respect your privacy

Get our Research for FREE