Canadian markets were caught in the middle of shifts in sentiment about growth prospects in various regions, says George Klar, president of ‘AlternativChronicle.’ Writing in its August edition, he says the emerging markets growth outlook is being lowered (as in China, India, Brazil, etc.) whereas developed nations (USA, Japan, and Europe) are being revised upwards. This explains, he says, why Canadian commodity and interest sensitive sectors were hit hard. However, given Canada’s geography and trade history, “we should slowly benefit from these strengthening economies.” Given current weak commodity prices, any uptick could lift markets sharply. Also, certain high-flying markets might prove unsustainable. “So for long-term patient investors, Canada might be a relatively low risk contrarian bet,” he says.
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