The lone equity sector that was the exception to this trend was the S&P/TSX Global Gold Index™, which saw a stark reversal of sentiment. Bullish sentiment dropped from 64% in the Q4 survey to 33% in the Q1 Survey, despite the fact that gold stocks delivered returns of more than 25% on the year. Similarly, bullish sentiment on gold bullion dropped from 66% in the Q4 survey to 35% in the Q1 Survey.
"For the last two years, advisors have been consistently bullish on the prospects for gold, coinciding with phenomenal returns for the asset class. This survey seems to suggest that most Canadian investment advisors feel that gold has had its run and may now be fairly- or even over-valued," Mr. Atkinson said.
The overvaluation explanation is a little odd, because major unhedged gold miners haven't outperformed gold itself since early December and haven't outperformed much this year. A one-year ratio chart of the Amex Gold BUGS Index versus bullion shows it:
The line moves up when the unhedged majors outperform, and vice-versa for bullion. It's evident that, despite much better earnings, the majors haven't fared all that well comparatively. Maybe the advisors surveyed got tired of waiting for the oft-talked-about leverage to show up.
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