This bearish macro picture masks an ongoing bull market in both precious metals, and industrial materials.

The precious metals bull market will continue, given quantitative easing, government debt and deficits, and particularly negative real interest rates.

Industrial materials markets will be led by population growth, an increase in frontier markets living standards, negative government policy decisions and decades of underinvestment.

In general, the market declines have made higher-quality companies more attractive than most small-caps, although very soft markets can generate some extraordinary small-cap values.

Canadian investors should continue way overweight in the high-quality Canadian oil and gas sector.

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