Historically in a high inflationary period like the late 1970’s, the TSX Composite sharply outperformed the US market.
Over the last 6 and 12 month periods, the Canadian equity market has performed much better than the US market.
The basic makeup of the TSX Composite is much more exposed to cyclical and commodity sectors than is the case south of the border.
Currently all commodities including crude oil, natural gas, wheat, aluminum, copper and fertilizers are in a long term uptrend based on a favourable supply / demand scenario.
Cyclical stocks and sectors normally outperform growth and defensive ones during the latter stages of a bull market.
Current inflation is at the highest level in North America in twenty years.
The loonie is currently trading at a historically low level relative to the US greenback compared to previous periods of high commodity prices, especially crude oil.