Canadian stocks have stormed to new highs in recent weeks and analysts say it is a trend that will continue as global investors look beyond the United States.

The post-pandemic world has been marked by military conflicts, rising populism and mounting fiscal pressures in advanced economies that are normally seen only in emerging markets, said analysts with Desjardins Group.

Economic and geopolitical uncertainty have unnerved investors and against this backdrop, the

S&P/TSX Composite Index

is acting as a “hedge against institutional fragility,” wrote the team led by Desjardins chief economist Jimmy Jean.

Since

Donald Trump

was elected president, the share of foreign countries buying U.S. Treasuries has fallen sharply, and investors are showing more interest in Canadian long-term bonds, the analysts said.

“As foreign interest in U.S. Treasuries wanes, Canada has emerged as a winner,” wrote Desjardins macro strategist Tiago Figueiredo.

Investors these days are increasingly looking for safety. One has only to look at gold, which today hit another record of almost US$4,000 an ounce amid concerns that the U.S. federal government shutdown would stretch on. This traditional safe haven has risen 50 per cent this year.

Canadian stocks are “moving in tandem with

global gold prices

as investors seek protection from potential U.S. dollar debasement,” said the analysts.

Fund flows into Canadian equities have been outpacing U.S. funds and the materials sector, which accounts for just 16 per cent of the TSX, drove nearly a third of the returns, beating even financials that carry double the weight.

“In an environment where institutional risks and macro volatility remain elevated, this linkage to hard assets has become a key differentiator for Canadian equities, even though the strength has extended beyond commodities,” they said.

And unlike the S&P 500 where gains have been concentrated around a handful of tech stocks, Canada’s rally has been broad based with about 80 per cent of the companies on the TSX posting positive returns this year.

“That concentration — alongside underperformance in broader U.S. equities — may be one reason why investors have increasingly turned to Canadian equities, which offer both diversification and more balanced sector participation,” they said.

Canadians are one of the largest foreign holders of U.S. equities, mainly due to domestic pension funds, but more of this institutional money could start to flow north under

Prime Minister Mark Carney’s

plan to fast-track major infrastructure projects.

Bloomberg reports that analysts see Ottawa’s major project push as a bigger positive catalyst for the TSX than

Bank of Canada

rate cuts and expect it will help the index continue to outperform the S&P 500.

“Canada’s been under-invested globally for years,” Greg Taylor, chief investment officer at PenderFund Capital Management Ltd. told Bloomberg. “If we actually start to see some concrete examples of growth, that could bring a lot of investor money back to the country.”

Delivering a

responsible federal budget

on Nov. 4 will be crucial to maintaining investors’ view of stability, said the Desjardins analysts.

“If Canada can remain the ‘cleanest dirty shirt in the laundry basket’ when it comes to G7 fiscal sustainability, there’s ample scope for more investors to park more money in federal and provincial bonds,” said Figueiredo.

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Canadians’ aversion to travelling to the United States right now is boosting the economy, said Sal Guatieri, senior economist at BMO Capital Markets.

The latest travel data showed that return trips were down more than 32 per cent this past year to July, “with no sign of a turnaround,” he said.

Return trips by car have fallen off almost 36 per cent, while the trips by air have dropped 16 per cent.

Americans have made 3 per cent fewer trips into Canada so far this year but this has been offset by a jump in visits from other countries, which are up more than 8 per cent.

“The “Buy Canada” movement doesn’t seem to be letting up, suggesting consumers will provide timely support to the economy again this quarter as per the previous one,” said Guatieri.

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As the holiday season approaches, the spirit of giving is in the air. Giving feels good, and whether you donate out of compassion, a sense of duty or a desire to support family, neighbours, community groups or local charities, your generosity makes a difference, writes credit counsellor Mary Castillo. But when charity takes a toll on your finances, it is time to take stock. Castillo offers some

practical tips

on ways to be generous without putting your financial health at risk.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s

Financial Post column

can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his

mortgage rate page

for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

Visit the Financial Post’s

YouTube channel

for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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