Call it the second election in a week involving Canada. The first, a national election that took place on Monday, saw a Conservative Party victory. That win reinforces the view of some trackers of foreign markets that investment portfolios should travel north of the border. Specifically, some point to such proposed economic stimulus by the Conservative Party as cutting taxes and designating $5 billion for new military spending.

Next, an investment election. Last year saw a record number of American investors pour billions into overseas markets, mainly through foreign oriented and individual country funds. It was a smart move as overseas markets ran rings around the major averages here. No wonder, then, that many Americans are scouring markets abroad to see which ones make sense in 2006.

So who wins the investment vote? Richard Moroney, research chief of Dow Theory Forecasts, a monthly newsletter in Hammond, Ind., casts his ballot in favor of Canada. One key reason is the above-average performances in the Canadian market.

Last year, for example, the S&P/TSX index of 278 Canadian stocks jumped 24.1%, or more than 4 1/2-fold the 4.9% gain for the S&P 500. Likewise,over the last three years, the Canadian index posted a 21.7% annualized return, roughly 50% better than the 14.4% return of the S&P 500.

Two of the newsletter’s favorite Canadian stocks are Canadian National Railway ($82.80) and life insurance biggie Manulife Financial ($52.56).

Assessing them, Mr. Moroney notes revenue of Canadian National rose 11% in the first three quarters of 2005, primarily due to rate increases. Mr. Moroney figures this pricing power, coupled with proven success in cost cutting, lends credence to management’s target of double-digit pershare earnings growth in each of the next five years and free cash flow of $1 billion annually.

At Manulife, a big life insurance company, Canadian businesses generated at least 25% of net income in the first nine months of 2005, while American operations accounted for 35% and Asian activities about 20%. Strength in the individual wealth management business and favorable investment returns are driving profit growth in Canada, while premiums, deposits, and funds under management are rising. Yet another plus: Higher individual insurance sales are contributing to strength in the American division.

For diversification, those investors who don’t want to rely on just a single stock, the newsletter recommends a standout mutual fund, Fidelity Canada, or an exchange-traded fund, iShares MSCI Canada Index.

Meanwhile, a note of caution: Many Canadian firms list their shares only on local exchanges, mostly the Toronto Stock Exchange. For an American investor, buying Canadian stocks may require a special dual-currency account. Further, commissions may be higher and online trading limited – so check the broker’s fees and services.

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FORD BOOSTERS BLINDED: Investors responded enthusiastically Monday to Ford’s widely anticipated turnaround plan to stem market share losses by bidding up the price of its shares that day 5.3%.The big news was a restructuring plan that calls for the closing of 14 plants and the elimination of up to 30,000 jobs.

If you were one of the Ford stock buyers that day, an economics professor at the University of Maryland, Peter Morici, thinks you’re blind. Addressing himself to the plan, he says, “The way forward reads more like Yogi Berra’s deja vu all over again. It is merely a slick reinstatement of [CEO] Bill Ford’s aspirations to do better. The automaker’s promises for better brand focus sound more like product positioning for fashion products. Unfortunately, Bill Ford is not selling Gucci handbags.”

Mr. Morici contends Ford’s turnaround plan lacks a clear statement of how it’s going to get its labor and design costs in line with its Japanese competitors. Lacking that, he says, Ford will not be able to offer vehicles that are competitive in price, quality, and amenities. Clearly, he adds, “Bill Ford sees the future, but can’t grasp it. He knows where the automobile industry is going, but does not have the resources or resolve to get his company where it needs to be.” In a nutshell, says our good professor, “The way forward looks like the road to Chapter 11.”