Rate cuts are coming, but Canadian investors should also be eyeing banks and oil

financialpost.com:

A lot of the outlooks Canadians read are about stocks down south, many focused on whether the bulk of them will catch up to the Magnificent Seven megacaps that have pretty much taken over the market, much to conservative investors’ chagrin.

Few focus on Canadian stocks and you can’t blame them. There are no sexy Big Tech-type stocks here, and the ones the Toronto Stock Exchange has had in the past flamed out in spectacular fashion: Nortel Networks Corp., Valeant Pharmaceuticals International Inc. and BlackBerry Ltd. pop to mind.

But even as the S&P/TSX composite index fades in importance on the global stage, much like the FTSE 100 in London, it still makes up a significant chunk of Canadian investing portfolios. Even if you actively avoid it, some of your retirement money is attached to the index given pension plans and other institutional investors own a bit of it.

Stock-market predictions, however, are notoriously poor, even in the short term. With that in mind, sticking to money managers’ thoughts, not numbers, is the better way to think about the coming year and there are some notable headwinds and tailwinds to keep in mind. Aside from whether inflation truly is dropping and central banks will begin cutting rates soon, and investors may be spending a bit too much time parsing out policymaker statements on that one, the fear of missing out (FOMO) could add some further fuel to equities.

“Investor greed, and blind faith could continue to melt markets up further even from here,” David MacNicol and Ken Reid at MacNicol & Associates Asset Management Inc. said via email. “We also believe there could be a catapultian effect in equity markets, when the money sitting in cash, equivalents, GICs, and T-bills re-enters the