John Hood, president and portfolio manager at J.C. Hood Investment Counsel Inc.
Focus: Options and ETFs

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MARKET OUTLOOK

The firm has been overweight the U.S. market for several years and will continue with that position. We have expanded the U.S. holdings by buying both small- and mid-cap assets as well as certain sectors. Despite concerns about the flattening yield curve as a harbinger of recession, assorted EU miasmas (Turkey being the most recent) and mini trade wars, the U.S. economy is doing very well, with the lowest unemployment rate in decades.

There are a couple of potential pitfalls, of course. The cut in corporate taxes is very beneficial, but it also means a decline in government revenues which will have to be offset either by large spending cuts or a surging economy. The trade wars could significantly disrupt economic growth, but so far the U.S. has the upper hand. 

I’m less confident in Canada because, even though markets have been more positive of late with increasing oil prices, the government appears to be more interested in exporting its “social license” agenda than trade negotiations and energy development.

TOP PICKS

ISHARE US MEDICAL DEVICES ETF (IHI.N)

Good for diversification in healthcare, not just big pharma. Recently bought in some client accounts at $207.

VANGUARD US DIVIDEND APPRECIATION ETF (VGG.TO)

Growing dividends. A more conservative play on the U.S.

ISHARES CORE US AGGREGATE BOND ETF (AGG.N)

I recommended U.S. Treasuries last time. This is an ETF with U.S. Treasuries (38 per cent), MBS mortgages (27 per cent), industrials (16 per cent), financials (8 per cent). Diversification from just Canadian dollar fixed income.

PAST PICKS: SEP. 1, 2017

VANGUARD FTSE CANADA ALL CAP INDEX (VCN.TO)

• Then: $30.77
• Now: $32.89
• Return: 7%
• Total return: 10%

HORIZONS BETAPRO S&P/TSX 60 INDEX ETF (HXT.TO)

• Then: $30.73
• Now: $34.16
• Return: 11%
• Total return: 11%

VANGUARD U.S. TOTAL MARKET INDEX ETF (VUN.TO)

• Then: $42.86
• Now: $51.94
• Return: 21%
• Total return: 23%

Total return average: 15%

WEBSITE: www.jchood.com