Greg Newman's Top Picks: Oct. 26, 2018

Greg Newman, senior wealth advisor, director and portfolio manager at Newman Group, Scotia Wealth Management
Focus: North American dividend stocks and protection strategies

MARKET OUTLOOK

A more hawkish Fed and Bank of Canada, a China trade war, a possible peak in American earnings, a probable Democratic win of the U.S. Congress, a higher greenback, the loss of the FAANG leadership, some evidence of escalating costs, sluggish auto and housing data and a slowing Europe and China have investors running for cover. Is this a typical garden variety correction or the beginning of something more sinister?

While I believe it will ultimately prove the former and fairly soon, having some extra cash may be prudent. Simply put, cash can be used to buy some of bargains that are forming or as a position to be enlarged to help cushion a further downdraft.

Own some cash, compelling positions that pay you to wait and those with idiosyncratic growth that are mispriced. Be prepared to white-knuckle it and gut it out. Most of us realize that building wealth isn’t always easy or in a straight line.

Try to approach and capitalize on this as the opportunity it most likely is.

TOP PICKS

INTACT FINANCIAL (IFC.TO)

Intact offers investors a usually steady growth. It’s currently at an attractive price.

STANTEC (STN.TO)

Stantec offers investors a good growth profile at an attractive price relative to its peers.

CASH

Having cash can allow an investor to be a strong hand and accumulate when others need to liquidate. It can also be used be used for optionality to build positions in fixed income.

PAST PICKS: NOV. 3, 2017

TELUS (T.TO)

• Then: $46.47
• Return: $44.83
• Total return: -4%
• Total return: 1%

THOMSON REUTERS (TRI.TO)

• Then: $56.89
• Now: $60.10
• Return: 6%
• Total return: 9%

RESTAURANT BRANDS INTERNATIONAL (QSR.TO)

• Then: $83.85
• Now: $72.46
• Return: -14%
• Total return: -11%

Total return average: 0%

WEBSITE: WWW.NEWMANGROUP.CA