One of the statistically beautiful things about the month of December is the so-called "Santa Claus rally" which often takes place - with the Toronto Stock Exchange still in the red heading into the last four weeks of the fiscal year, hopes are that such a rally could potentially take Canadian stocks into the black for the year. Just how likely such a scenario is to pan out, however, remains to be seen.
Weakness in global technology markets has crept into Canada, with the country's largest and highest profile tech names seeing negative growth in recent months. Finding a scenario where the tech sector manages to rebound substantially in the space of just a few weeks seems to be wishful thinking at this point in time.
Various Canada-specific issues such as the rock-bottom price of heavy oil-sands crude has hit crucial commodity sectors hard.
Canada's oil & gas sector, once a beacon for job creation and international investment, has been nixed by many multinational firms, with the differential between Canadian and global grades of crude hitting all-time highs recently.
Though the government of Alberta has stepped in to attempt to save the day, questions remain around just how much further many Canadian oil & gas companies can drop before rebounding.
My personal take is that 2018 will go down as a year of zero or negative growth for Canada, with much of the same for 2019.
Investing outside of Canada in times like these helps diversify returns and allows for the potential for outperformance relative to the TSX.
Invest wisely, my friends.
