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After 12 years of being ruled by the Liberal party, Canadians elected the Tories to power on Monday, giving an already strong nation another reason to be increasingly optimistic about its future. Despite a strong economy, the Liberal party was ousted as allegations of corruption resonated throughout the country. While many leaders, such as Brazil's Lula de Silva seemingly have escaped similar accusations, the people of Canada have made a strong statement on their tolerance level for corrupt government officials. While the Prime Minister position may now be occupied by the Tories, parliament is well divided by multiple parties, leaving the Tories without an absolute majority. Passing reforms on such campaign promises such as the elimination of capital gains taxes and a reduction in sales taxes will require convincing at least 30 outside members, mostly liberal-minded politicians, to the benefits of these changes. If this obstacle could be overcome and capital gains reform passed, the Canadian stock market may potentially be the world's best performing market over the next decade. Already one of the most natural resources rich economy on the planet, companies all over the globe have invested large sums of money in the mining industry and the tar sands in Northern Alberta. As a result, the Canadian currency has appreciated 28% against the US Dollar in the past few years. As the commodity bull market continues, The Commodity Investor expects continued gains for the Canadian Dollar over the next decade may magnify the possible returns in stocks. In combination with market based political reforms and the exciting possibility of a decrease in
capital gains taxes, an investment in Canadian stocks may prove to be extremely profitable. With the election of the Tories, Canada is the most politically strong of the major natural resource countries. While Russia, Brazil, and arguably Australia seem to be moving towards a more socialistic system, Canada is moving in the opposite direction. The Commodity Investor advises readers to keep an eye on EWC, an ETF which broadly tracks the performance of the Canadian market. Purchases on any significant drops are recommended. |
