TSX Composite Index Forecast

Market Commentary 9310
January, 2012 Data:

Part 1
FORECASTS

12 MONTH FORECAST
The 12 month forecast for the TSX Composite Index is in the table at the top of
this page. Foercast-Chart.com is forecasting a TSX Composite Stock Index of
13240. The table shows a HDTFA of 1892 which suggests that the February,
2013 S&P TSX Index could easily close anywhere between 15133 and 11348.
Links to Forecasts for twenty-two other stock indexes may be found on the right
side of this page.

10 YEAR FORECAST
Foercast-Chart.com publishes a Ten Year Forecast for the TSX Composite
Stock Index. The Ten Year Forecast estimates the probability that the TSX will
achieve certain gain or loss benchmarks at a point in time ten years in the
future. For example, look at the top line of the table immediately below this
paragraph. Foercast-Chart.com is forecasting a probability of 3% that the TSX
Composite Index will be down at least 20% in 10 years (January, 2022 close
compared to January, 2012 close).

                             PROBABILITY
Down at least 20%          3%
Down at least 10%          4%
Down                               5%
Up                                   95%
Up at least 10%               94%
Up at least 20%               92%
Up at least 30%               90%
Up at least 40%               83%
Up at least 50%               76%
Up at least 100%             55%
Up at least 150%             42%
Up at least 200%             30%

Over 100 YEARS of historical data was used to calculate the probabilities in the
table above. Dividends are not included so you must add expected dividends
to the forecasted gain to estimate the total return. Each month, new data is
entered into the forecasting model and the S&P TSX Index is assigned a rank
from 1 to 10. The best rank is 10 and the worst is 1. That ranking determines
the Ten Year Forecast for the TSX Composite Stock Index . The data used in
the forecasting model is updated monthly and may change the forecast,
particularly after substantial movements in the S&P TSX Index. The latest
ranking of the TSX is 6. Forecast-Chart.com publishes a 10 Year Forecast for
12 of the 23 stock market indexes covered at Forecast-Chart.com. The indexes
with the highest probability of gaining over 200% in the next 10 years are the
Russell 3000, the Russell 1000 and the S&P 500. The indexes with the lowest
probability of gaining over 200% in the next 10 years are the S&P SmallCap
600 and the S&P MidCap 400. To see these forecasts, click the Stock Market
Forecast link in the upper right corner of any page, then select the index you
are interested in. The forecast for the TSX Composite Index is designed for
Canadian Dollar based investors . Returns for investors not based in the
Canadian Dollar will be affected by currency fluctuations.

The last time that the TSX Composite received the worst rank (1) was 9/2000,
when the TSX Composite Index closed at 10321. The last time that the TSX
Composite received a rank of 2 was 10/2007, when the TSX Composite Index
closed at 14625. Last month's close for the TSX Composite is in the Market
Highlights section below.

Part 2
MARKET HIGHLIGHTS

All Time High                          14715 (May, 2008)
January, 2012 close               12452
Decline From All Time High     15%
10 Year Return                       65%
5 Year Low                             8123 (February, 2009)
Gain From 5 Year Low            53%

The highest all time monthly close in the TSX was 14715 in May, of 2008. The
January, 2012 close was 12452. That's a decline of 2263 points or 15% below
the TSX Composite all time high. The TSX Composite Index is up 65% over the
last 10 years. It has lost 8% over the last 12 months.

The January close was 497.06 points higher than the December, 2011 close of
11955, resulting in a 4.16% rise in January.

The 5 year market low for the TSX Composite Stock Index was 8123 in
February of 2009. The January, 2012 close at 12452.15 represents a 53% gain
since February, 2009.

Foercast-Chart.com's historical research covers the S&P TSX Index back to
January, 2000. All calculations are based on the monthly market close in the
TSX, excluding dividends.

This page provides a five year chart and a forecast for the TSX Composite. For
links to longer term charts, look at the links under the five year chart (above).
One link opens a ten year chart. Another opens our longest term graph on the
TSX Composite Index. Just one glance at our long term charts can provide
tremendous insight into the historical trends of the financial markets.

In this site, you may view the month, year, five & ten year returns for 23 stock
market indexes in one convenient table. U.S. & foreign, small cap & large cap
indexes are included. Click the Market Trend Research link in the uppermost
left corner of any page in this site. The table of contents for Market Trend
Research will open. Click the link to the Stock Index Return Scoreboard in the
table of contents.

Part 3
ROLLING RETURNS, 1999 - 2012: TSX Composite Index

Rolling Period          Last / Percentile          Best / Average / Worst
  1 Year                     -8% / 27th                  43% / 4% / -40%
  2 Year                     12% / 48th                  74% / 12% / -41%
  4 Year                     -5% / 17th                  113% / 28% / -24%
  8 Year                     53% / 48th                  123% / 56% / -4%

How do you read the table?
For example: Rolling 2 year period returns are shown on the second row. In the
latest rolling 2 year period, (2/2010 - 1/2012), the TSX Composite Index
returned 12%. That period scored in the 48th percentile, meaning that it scored
better than 48% of all rolling 2 year periods since 1999. The Best rolling 2 Year
period since 1999 returned 74%. The worst returned -41%. The average rolling
2 year period returned 12%.

What is a rolling period?
It's an overlapping period in a data base. For example: In the 2 year period
included in 2000 - 2001, there are 13 complete rolling 12 Month Periods. The
first is January, 2000 - December, 2000. The second is February, 2000 -
January, 2001. The third is March, 2000 - February, 2001 and so on. The last
complete rolling 12 Month Period in the 2000 - 2001 period is January, 2001 -
December, 2001.

How is this information useful?
Best and worst case scenarios may be estimated based on historical facts.
Also, the relationship of the periods is sometimes very helpful. Suppose that the
worst rolling 8 year period in the last 50 years returned -30%. Suppose also
that the latest 4 year period has returned -50%. Market psychology at this point
may be one of great fear or possibly even panic. If the market stays flat for 4
more years, it will break the 8 year decline record by a whopping 20%! (-50%
minus -30% equals -20%.) 50 plus year records are not often broken. That
provides reason to hope that the market will recover that 20% over the next 4
years. If it does, then the 8 year loss will be 30%. The longest index histories
are found in the DJIA, FTSE 100 with FT 30, DJTA, DJUA, S&P 500, & NASDAQ
100

The number of periods in each category for the TSX Composite Index are as
follows:
1 Year: 134
2 Year: 122
4 Year: 98
8 Year: 50
16 Year: 0

Dividends are not included.

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Monthly close for the S&P/TSX Composite Stock Index is plotted in gray. The forecast for the target
month is shown in green. See other links related to this stock index below.

TSX Composite Stock Index - 5 Year History