Money Reporter, MPL Communications Inc.133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846
The final numbers are now in, and it turns out that the S&P/TSX Composite Index had a pretty good 2013, despite being in the red for much of April and all of June and early July. On December 31, 2012 the TSX closed at 12433.53, and on December 31, 2013 it closed at 13621.55, which translates into a gain of 9.55%. With a few dividends and a bit of luck, you probably made over 10% on your common stocks this past year.
That's better than the 4.00% the TSX made in 2012, and much better than the loss of 11.07% it suffered in 2011. This past year was the best since 2010, when the market was up 14.45%, which in turn pales against the 30.69% the TSX made in 2009.
This is why we're constantly telling you to buy and hold, to always stay invested through thick and thin. Over time, despite a bad month or a bad year now and then, you'll make money if you don't try to time the market.
While the TSX in the end had a pretty good year, it was nothing compared to how the big U.S. markets performed. The biggest influence on the markets south of the border was the massive campaign of quantitative easing, under which the Federal Reserve Board has been buying US$85 billion of Treasury bonds and Treasury bills per month, and still hasn't started tapering it off.
The quantitative easing allowed U.S. investors to make out like bandits. The Dow Jones Industrial Average rose 26.50% in 2013 (7.26% in 2012, 5.53% in 2011, 11.02% in 2010, 18.82% in 2009), the S&P 500 gained 29.60% (13.41% in 2012, 0.00% in 2011, 12.78% in 2010, 23.45% in 2009) and the Nasdaq Composite put on an amazing 38.32% (15.91% in 2012, -1.80% in 2011, 16.91% in 2010, 43.89% in 2009).
In terms of the Group of 21 most major markets in the developed world, Nasdaq's performance ranked second, the S&P 500 ranked third, and the Dow ranked fourth. On the same scale the TSX ranked 15th in 2013.
The fastest-growing equity market on the planet this past year was Tokyo's Nikkei Index. It was up an astonishing 56.72%. It would seem that the country has put the tsunami, the earthquake and the nuclear meltdown behind it.
Also ranking well on the global scene was Finland's HEX, with a fifth-best return of 26.47%. The worst in the Group of 21 was Brazil's Bovespa, down 15.50%.
Back to the TSX, the best three sectors to be in in 2013 were: health care stocks, up 39.99%, consumer goods stocks, up 39.53%, and industrial stocks, up 34.95%.
The three worst TSX sectors to be in were: gold stocks, down 48.37%, materials stocks, down 30.60%, and metals and mining stocks, down 21.64%. We concentrate our choices a lot on utilities/telecom and financial stocks: utilities stocks fell 8.90% as a group and telecoms rose 6.20%, and financials rose 22.09%. As always, diversification is key!
Money Reporter, MPL Communications Inc.133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846