The S&P/TSX composite index could pass the Dow Jones industrial average in the next few days or weeks, as it did back in 2000, says National Bank Financial says in a research note.

This time, it isn’t all likely to end in tears, the brokerage firm says, but Canadian investors should still be looking for more foreign content.

NBF recalls that the S&P/TSX surpassed the Dow back in July 2000. “Is history repeating itself and are we heading for the same disturbing outcome?” it asks.

The firm concludes that this is probably not the case this time around. “In 2000, the S&P/TSX performance was essentially led by Nortel,” it recalls. “Even though the energy sector represents 24.8% of the S&P/TSX, the breadth is much better this time,” it says.

“However, Canadian investors should not be fooled by this ‘new North American tiger’,” it adds, “since our productivity gains are failing to match the U.S. In addition, history tells us that ‘new era’ themes from Bay Street could trigger second thoughts.”

“With non-performing loans in China estimated at 30%, a bilateral trade surplus with US representing 37% of the U.S. non-energy trade deficit and growing difficulty to sterilize its surging foreign reserves, China faces a challenging time,” it cautions, suggesting that its huge energy demand may not prove sustainable.

“Canadian investors should take the opportunity of the recent 30% RRSP foreign content limit removal by diversifying their equity exposure outside Canada,” it concludes.