High odds coronavirus will put Canada into a recession: David Rosenberg
Markets have given investors whiplash during a trading week when a global stock rout deepened amid fears over the rapid spread of the coronavirus.
While it may be difficult to digest the numerous headlines surrounding the concerns pushing markets down and fuelling volatility, BNN Bloomberg spoke to economists and money managers about how Canadian investors can navigate the market storm.
Chris Blumas, vice-president and portfolio manager, GlobeInvest Capital Management Inc.
“You don’t want to panic, which is one of the hardest things because of the headlines. The second thing is for people who are investing, you usually already have a diverse portfolio so you won’t be hit completely.
When you are setting up your portfolio, remember that things like this happen and prepare for them. I think you want to take advantage of the volatility these businesses are facing, so keep a shopping list. That way when there are these moments, you have that buy point already set so when they dip you can get into them.
We set out our asset allocation ahead of time, but we haven’t been putting money to the side. We have been deploying that in some of the names that we have been waiting to fall.”
David Rosenberg, chief economist and strategist, Rosenberg Research
“I think that what you want to do is de-risk, get as defensive as possible.
I think that taking a look at what’s worked this week might be a short microcosm. If you are going to be in the equity market, you want to be in the essentials. You want to be in food products – you know that’s worked very well. There’s been other areas that are very defensive, that have worked. I think the gold miners are to me almost a no-brainer as to how you want to be positioned, but you want to be defensive in more of the consumers staples groups.”
Brian Madden, senior vice president and portfolio manager, Goodreid Investment Counsel
“Take it in stride. You need to understand that markets will pull back 10 per cent or more, on average, at least once a year. So in the moment, you are riveted to your screen and it can seem unsettling, but you need to step back and realize that this is normal.
I think the strategy is the same as ever. Have an asset mix that makes sense for you, that’s going to be a function of your own personality, tolerance for risk, age, experience as an investor, your income, and investment goals. That investment strategy is not something that should be blowing in the wind. So if someone has a sound investment strategy and asset mix, then they should be able to ride through tumultuous times – or even worse – without doing anything.”
Keith Richards, president and chief portfolio manager, ValueTrend Wealth Management
“When the market gets this bad, everyone says it’s a buying opportunity. But if you don’t have cash already, then what are you buying with? You need a trading program in place to take advantage of this, which is why buy-and-hold people suffer during these times.
We are better-positioned since we can buy stuff really cheap right now. That means start to leg out of your defensive positions of cash and gold and move into your higher-volatility stocks that you wish you could have bought before.”
Matt Manara, partner and portfolio manager, Avenue Investment Management
“Right off the bat, do not get emotional about it. If you are working with a financial professional, hopefully they understand your life to balance you effectively between stocks and bonds. If you need regular income out of the portfolio, hopefully they have already accounted for it.
If you are a Canadian investor, you have to be mindful of the U.S. dollar as it can have a big impact on your portfolio. Sell some of your U.S. assets so you have a buffer, and have some precious metals, which will help with inflation over the decade.
You want to own things that have hard assets such as gold, silver, real estate, infrastructure, and companies where you own the existing assets. You want to have things that will typically perform better during a uptick in inflation.”