David Baskin, president of Baskin Wealth Management
Focus: North American large caps
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MARKET OUTLOOK
We expect economies in the developed world to continue to experience low growth for the foreseeable future. A combination of bad demographics arising from low birth rates and aging populations, restrained government spending and stagnant corporate profits make it unlikely that growth will exceed three per cent in any major OECD country. Stock markets have risen in spite of stagnant corporate profits because they offer a better alternative than fixed-income markets, where real yields are mostly negative. We do see pockets of growth and sectors which are likely to do better than the economy as a whole, and we believe that in the current environment, active investment management may be able to add significant value. Modest increases in interest rates in the United States are, in our view, already priced into the major stock markets, and an increase in short term rates to the one per cent level by the end of 2016 poses little threat.   

TOP PICKS

POWER CORPORATION (POW.TO)
Power Corporation trades at a significant discount to its net asset value of about $35. This is a company which will benefit from increased interest rates. It offers a very attractive dividend yield of 4.6 per cent, giving investors a continued reward for waiting for its value to be recognized.

VISA (V.N)
Visa is in the attractive position of dominating the international credit card market. It is adapting to new payment systems and has a long growth runaway ahead of it in Europe and Asia. Many countries are moving towards non-cash societies, a trend that can only benefit the major players. Not a cheap stock, but it is worth paying for the market leader.

ZIMMER BIOMET HOLDINGS (ZBH.N)
Zimmer Biomet is a designer and manufacturer of medical devices, chiefly musculoskeletal prosthetics such as artificial hips and knees. The company has grown through acquisition, and will benefit from aging populations. The company trades at an attractive valuation and we expect significant synergies from its recent acquisition of Biomet.
 

PAST PICKS: SEPTEMBER 24, 2015

GENERAL MOTORS (GM.N)

• Then: $29.44
• Now: $31.55
• Return: 7.17%
• TR: 12.34%

TD BANK (TD.TO)

• Then: $51.02
• Now: $58.13
• Return: 6.89%
• TR: 19.85%

TELUS (T.TO)

• Then: $42.45
• Now: $42.88
• Return: 1.01%
• TR: 5.53%

TOTAL RETURN AVERAGE: +12.57%
 

TWITTER: @DavidBaskinBWM
WEBSITE: www.baskinwealth.com