Knowing The Canadian Market Base Helps Investors Make Money
Understanding the base of the Canadian investment market opens doors for investment profits. Canada used development of abundant natural resources to build a rich nation. The nation grew on that broad base of natural resource exploration, development and production.
Today, manufacturing, technology and a contemporary, sophisticated urban culture forms the Canadian mosaic. All founded on a natural resources base that remains a pillar of the Canadian economy and wealth.
The earlier posts in this blog series provided the background that natural resources and their development are the original base of the Canadian stock markets. That natural resource big picture background lets us understand the very reason that Canada developed as a nation. Today, those rich and extensive natural resources, continue as major contributors to Canadian prosperity.
This post is Part 8 of the White Top View Series, Stock Markets, basic discussions of the American and Canadian stock markets. Links to all parts of the series are at the end of this post.
We need that big picture and context before we number crunch to seek an individual investment opportunity. Most investment opportunities and financing needs, during the early decades of the Canadian stock markets, directly related to exploiting natural resources. Many of the best investment opportunities still do.
Today, stocks of companies related to natural resource discovery, development or service remain a very large proportion of the listings on both the TSX and TSX Venture Exchanges.
Urban Citizens And Rural Resources
Metropolitan centers are home to 80% of the Canadian population that live in technology rich dwellings. Living, working and commuting in climate controlled urban comfort can remove or dull awareness of our environment and our history. We urbanites can easily forget our economic and cultural past. Being oblivious to how our economy functions and supports our contemporary lifestyle, does not change the facts.
When you know the Canadian market base, you understand that Canadian society is very closely tied to natural resources. Products of the auto sector, but also the most advanced academic research, artistic or medical breakthroughs or an international sports triumph, are directly based on a Canadian economy largely built on exploiting abundant natural resources.
Amazingly, employment numbers do not show this! The work of most Canadians is far removed from finding, developing, harvesting, digging, hauling or pumping natural resources.
Still today, big bucks come from those resources! The huge production and export numbers tell the tale! Resource production continues to produce an ocean of Canadian wealth! Investors knowing this, position themselves to take advantage of resource sector opportunities!
When we understand this, we can more effectively, profitably and consistently get good results from investing in Canada. As always, we need both the market and economic context. With it, events, strategies, changes and results can all be better judged and well understood. That gives us a huge advantage over the uninformed. Knowing is smart investing.
Knowing allows us to see opportunities and invest where favorable forces help us profit. It also lets us move out-of-the-way when conditions or circumstances are not favorable. Doing so follows rule 1; Warren Buffett has taught us “Don’t lose money”.
Production of the newest mobile technology, life extending drugs, exceptional insurance offerings or financing products are all creations of modern companies in Canada. They would not, could not, exist without the natural resource production base that established the Canadian economy.
These generalizations apply universally, and are not limited to the Canadian market. Pick any oil crisis or economic shock you choose. Consider how any significant impact quickly affects any economy or company. We live on and of the earth. And, in that sense, all economies are natural resource based.
Our number crunching or web surfing while sipping a caffè latte would abruptly come to an end, without our natural resource base. In fact, it simply would not happen at all.
Now, knowing the natural resource context of the Canadian market, we can better position ourselves to make money. Investing with long-term success in Canada, remains in many ways, both directly and indirectly, tied to those natural resources.
With that background and understanding, you will begin to see and seize opportunity others can miss. Using that information, gives you a different lens to use when viewing the Canadian market. It lets you see both money-making resource opportunities as well as others. That gives you a new tool to use when looking at all markets and opportunities. That can help you make smart investment decisions.
These investing effects apply everywhere, but disproportionately so in Canada. Knowing this also lets you avoid money losing risks that others fail to perceive or do not understand.
Future discussions will cover these points in greater depth.
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These discussions and information intend to help you better understand markets and investing. I am not a financial or investment advisor; opinions are for informational and educational purposes only and are not intended as investment advice. For syndication of the site or blog, please contact info@WhiteTopInvestor.com.
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Links to the White Top View Series, Stock Markets