Resource World Magazine

24 www.resourceworld.com o c t o b e r / n o v e m b e r 2 0 1 6 T here's a saying: "A correction is good for the market – until it happens to you." That said, I think the resource markets have just come through not only a good correction, but one that was also healthy for all players in the market. Here's my thoughts. If we look at the benchmark for the resource market – the TSX Venture Exchange – it has come from a low of about 466 in January of this year and rose almost steadily for some seven months to a high of about 835 in August for a gain of about 77%. And while all of this was good for the beleaguered bourse, its companies and its shareholders, the price of the underlying commodities that make up companies on this exchange have not fared quite so well. Case in point – gold bullion – the com- modity that seems to attract most of the exchange's attention – is up by about 25% in 2016. Zinc is up 46% while copper is down by 2% and uranium is off by over 25% year to date. In the petroleum sector, crude oil and natural gas are up by 5% and 25% respectively so far this year. So while the rally this year has been long overdue and a great relief, it may have gotten a little ahead of reality. As I write, this correction has taken the Venture Exchange back down about 6% to just above the 800 level. Percentage wise, this has not been an excessive correction as in previous years such as 2014 where we've had Venture Exchange corrections of well over 20%. This one just feels like a large correction because bull market corrections tend to come and finish quickly and get people's attention as opposed to the longer dragged out corrections of bear markets that tend to put investors to sleep. I mentioned that I thought this correc- tion was good and healthy for everyone and there are a few reasons why this is. For those who missed the initial rally earlier in the year it gives them a change to enter the market without the fear of chasing a high flyer. For those who took profits towards the end of the rally it gives them a chance to reposition or re-enter the market. For speculators it shakes out the weak links who will re-enter the market when the Venture Exchange turns positive once again. Plus, unlike recent years, this correction has not been caused by a natural disaster like a tsunami, or the collapse of the price of gold, base metals or crude oil. This correction was caused by the usual wall of worry that all bull markets periodically run up against. You can add your favourite reasons here. While there may still be a few shudders to the downside, it looks to me like this cor- rection, for the most part, has run its course. Resource prices tend to improve in the last quarter of the year which, barring a calam- ity, should once again pull resource stock prices higher. If you haven't already done so – take advantage of this correction. n Rodney Blake is an Investment Advisors with Canaccord Genuity Wealth Management, a division of Canaccord Genuity Corp, Member-Canadian Investor Protection Fund. The information contained in this article is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in provid- ing it does Rodney Blake, Canaccord Genuity Corp, or its subsidiaries, or affiliated compa- nies, assume any liability. This information is current as of the date appearing in this article, we do not assume any obligation to update the information or advise on further developments relating to these securities. This article should not be considered personal investment advice or a solicitation to buy or sell securities. Canaccord Genuity and hold- ings of its respective directors, officers and employees and their associations, from time to time may buy or sell any securities men- tioned herein. The views expressed are those of the author and not necessarily those of Canaccord Genuity Corp. He can be reached at 604-643-7567 or rod.blake@canaccord. com At the Market by Rodney Blake A good and healthy correction

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