What's wrong with Canada's stock markets? 

 Chart courtesy of globeadvisor.com 

Note the abysmal performance in the last 12 months of Canada's main stock market index(S&P/TSX Composite Index) compared to a well known international fund from Trimark (see blue line on chart above). The Trimark fund which is diversified internationally is currently about 15 percentage points higher than the Canadian stock market index (red line on chart) as at August 28, 2012. 

The chart indicates a divergence starting about a year ago or so and was likely caused by the steep decline in Canadian commodity prices. Anything that could be mined or sucked out of the ground (energy) was vulnerable and while Canadian stock markets suffered, other stock markets around the world did much better - especially the U.S. http://advisorperspectives.com/dshort/charts/markets/SPX-snapshot.html?current-market-snapshot.gif 

Lesson learned is to always diversify regardless of what the news headlines are telling you. If you are an investor with exclusively Canadian holdings and relatively few foreign holdings, you could be disappointed with your portfolio performance this year. 

Related articles from wealthadviser.ca (October 2011): http://www.wealthadviser.ca/index.php/newsletters/112-explosive-market-move

Note: the broad based U.S. stock market index S&P 500 is about 36% higher since October 2011.

Tentative market call: Is the commodity correction over and set to recover?

We'll know better when the TSX index starts to catch up to the U.S. stock market indicies i.e. Dow Jones, S&P 500