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Here's some bad news if you are growing impatient with Canada's underperformance relative to the S&P 500: We could be within a 12-year "secular" leadership cycle, meaning that the underperformance could have another decade to go, according to Bank of Nova Scotia strategist Vincent Delisle.

His numbers suggest that the S&P/TSX composite index has been dragging its feet for 26 months. In 2013 alone, the Canadian benchmark index has slipped more than 3 per cent in U.S. dollar terms, while the S&P 500 has rallied some 14 per cent. Over the past 26 months, the performance difference (again, in U.S. dollar terms) has been a whopping 41 per cent – marking a massive shift from the years 2001 through 2011, when the TSX was top dog and outperformed the S&P 500 by 247 per cent.

According to Mr. Delisle, there have been four leadership cycles since 1950, averaging 12 years each. "In our view, ongoing TSX underperformance could be the start of a fifth secular cycle," he said in a note.

But wait, there could be an opportunity for nimble investors here. That's because there are brief periods of leadership reversals within these long-term secular trends. What would trigger a reversal that would give the lagging TSX a boost over the S&P 500? Mr. Delisle believes there are five factors:

1. A deeper discount valuation for Canadian stocks.

2. A lower Canadian dollar.

3. A stabilized or recovering Canadian housing market.

4. A improvement in Canadian corporate earnings that overshadows U.S. earnings.

5. Accommodative monetary policies in China and emerging markets.

Mr. Delisle argues that factors 1 through 3 should appear later this year. Factor 4 could be elusive and factor 5 "remains a challenge."