{"id":272419,"date":"2010-02-03T09:34:00","date_gmt":"2010-02-03T14:34:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:390564"},"modified":"2010-02-03T09:34:00","modified_gmt":"2010-02-03T14:34:00","slug":"time-for-a-retail-fuelled-rally","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/272419","title":{"rendered":"Time for a retail-fuelled rally"},"content":{"rendered":"<p>The rally in equity markets has reached a turning point that should now see Canadian retail investors start pouring more money into stocks, according to a new report from Scotia Capital. This comes as concerns mount about the source of money to feed continued market inflows.<\/p>\n<p>Historically, turning points in the S&amp;P\/TSX composite index have led turning points in net inflows into equity mutual funds by about six months, economists Derek Holt and Karen Cordes said in a research note. This has been consistent in both market directions.<\/p>\n<p>They looked at the TSX\u2019s year-over-year percentage change versus net quarterly inflows into equity mutual funds and found that the equity market rally has just reached the point at which it should begin to translate into retail inflows. In fact, the charts suggests the reaction time may be a little bit faster this time around. <\/p>\n<p>The economists cite three other forces that may serve to complement this historical relationship.<\/p>\n<p>One is the fact that this lagged relationship between market performance and fund flows occurs as RRSP season gets going over the next two months.<\/p>\n<p>It is also set against the backdrop of massive amounts of cash on the sidelines and near-cash balances earning very little in returns after inflation and taxes.<\/p>\n<p>Third is the fact that confidence in the Canadian economy continues to improve. Scotia notes that Canadian households managed to regain much of their lost retirement wealth in balanced portfolios, while also enjoying record house prices.<\/p>\n<p>The net effect of all this should encourage retail investors to sweep non-tax-sheltered deposits across to tax sheltered vehicles like RRSPs and TFSAs with a potential equity bias, the economists said.<\/p>\n<p>\u201cThis effect does not require a higher personal saving rate (that would come at the expense of consumer spending) in order for it to occur.\u201d <\/p>\n<p><a href=\"mailto:jratner@nationalpost.com\">Jonathan Ratner<\/a> <\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/network.nationalpost.com\/np\/aggbug.aspx?PostID=390564\" width=\"1\" height=\"1\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The rally in equity markets has reached a turning point that should now see Canadian retail investors start pouring more money into stocks, according to a new report from Scotia Capital. This comes as concerns mount about the source of money to feed continued market inflows. Historically, turning points in the S&amp;P\/TSX composite index have [&hellip;]<\/p>\n","protected":false},"author":4059,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-272419","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/272419","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4059"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=272419"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/272419\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=272419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=272419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=272419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}