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An employee works on pipes made for the South Stream pipeline at the OMK metal works in Vyksa in the Nizhny Novgorod region April 15, 2014.
An employee works on pipes made for the South Stream pipeline at the OMK metal works in Vyksa in the Nizhny Novgorod region April 15, 2014.
(Sergei Karpukhin/Reuters)

Ditch resource investments, yield curve says

The ability of fixed income markets to predict performance for equities is almost like magic to me. Time and again, the shape of the yield curve has accurately forecast the most important driver of equity returns – future earnings growth.

According to Richard Bernstein, former chief quantitative strategist at Merrill Lynch and founder of Richard Bernstein and Associates, what bond markets are telling investors now is that the emerging-markets growth spurt is over. And, with developed markets regaining global economic growth leadership for the foreseeable future, a major portfolio overhaul will be necessary for many Canadians.