Canadian banks have been one of the most egregiously over-valued sectors on QE-hype the past couple of years. Their much overdue price correction is now gaining momentum. Sadly, Canadian investors have never been more overweight both in individual stocks and mutual funds focused on financials, but also in broad market funds and ETFs that replicate the TSX index–today 37% concentrated in financials. Modest dividends of 3 to 5% will once more prove insufficient suave for the ravage of capital losses.
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