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

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MARKET OUTLOOK

It’s been a tumultuous few days, with Donald Trump’s bluster at the G7, the virtual collapse of NAFTA negotiations, and the previously ridiculed Justin Trudeau draped in the “Captain Canada” mantle with PC Leader Andrew Scheer and Ontario’s Premier-designate Doug Ford as cheerleaders. Trump’s seeming rapprochement with Kim Jong-un and his invitation for Russia to rejoin the G7 added to the unreality of the political grimoire.

Yet the markets shrugged it all off with modest gains and traders seemed to be more focused upon today’s Fed funds rates. So they should. Even if Kim isn’t being disingenuous like his predecessors, denuclearization is a process requiring many years. There’s a geopolitical imperative that Canada and the U.S. remain closely bound trading partners despite the petulance of the current leadership. So the question is: will we still be seriously talking about this in one month or three? This is why it makes more sense to talk about the Fed rate than anything else.

We will continue to overweight the U.S. markets, step gingerly into developed and emerging markets and underweight Canada until there’s a discernible energy policy that’s not predicated upon nationalization and tax policies that make us competitive with the U.S.

TOP PICKS

VANGUARD MID-CAP INDEX FUND ETF (VO.US)

ISHARES S&P U.S. MID CAP CANADIAN-HEDGED ETF (XMH.TO)

ISHARES S&P/TSX HIGH DIVIDEND INDEX ETF (XEI.TO)

PAST PICKS: SEPT. 1, 2017

VANGUARD FTSE CANADA ALL CAP INDEX (VCN.TO)

• Then: $30.77
• Now: $33.11
• Return: 8%
• Total return: 10%

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

• Then: $30.73
• Now: $33.97
• Return: 11%
• Total return: 11%

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

• Then: $42.86
• Now: $50.77
• Return: 18%
• Total return: 20%

Total return average: 14%

WEBSITE: http://www.jchood.com/