As most of my readers are American, they are likely unfamiliar with the S&P/TSX Composite. This index is basically the Canadian equivalent of the NYSE Composite or the Dow Jones Industrial Average. Some of the largest companies in Canada are listed in the S&P/TSX Composite.
I write about this index often because I believe if you’re not already invested in the S&P/TSX, you should be. The TSX was one of the world’s best performing stock markets in 2006. So far this year, in only six weeks, the S&P/TSX is already up 6%. Why the big gain?
The TSX is laden with precious metal and resource stocks. And, with investors continuing to turn to gold and other precious metals, the TSX continues to boom.
I’ve often written about my fondness for gold stocks. The TSX is home to the listings of some of the largest and best-managed gold producers in the world. As precious metal prices continue to rise, so will the TSX. As oil prices rebound, the TSX moves higher too.
With daily trading of about $6 billion, the TSX trading volume pales in comparison to the NYSE. But the exchange does offer good liquidity for large companies, many of which are American based in the first place and listed on the TSX as a secondary exchange.
If I had to pick one exchange that would rank as the best performer of 2007, it would be the TSX. Interest rates in Canada remain very low, and they are not expected to rise any time soon. Americans looking to diversify their portfolios, both as a hedge against the U.S. dollar and a play on gold bullion’s price rise, should consider the TSX. Most brokers in the U.S. can buy stocks on this exchange.
NEWSFLASH — Europe’s biggest bank, HSBC, reported yesterday that it is increasing its loan-loss provisions for 2006 as mortgages to risky U.S. borrowers are “going bad” at a faster clip than the company originally estimated. More proof the U.S. housing market is in trouble.