John Hood, President and Portfolio Manager, J.C. Hood Investment Counsel

Focus: Options and ETFs
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Market Outlook
In recent months, markets have been dominated by what central banks are going to do about interest rates. More recently, the central bankers have been upstaged by the raucous and at times obstreperous presidential debates. I continue my bullish bias on the U.S. market as the economy continues to improve, but what worries me is not the Fed nor elections but, rather, prices. Both equities and bonds are at all-time highs and at some point, something has to give! As a result, I have not been buying aggressively and hold an overweight cash position. I am also looking at alternative strategies to hedge portfolios over the next few weeks whether put options, inverse ETFs or just sitting on the sidelines with cash. Of the short-term trades that were done earlier this year, proceeds have been left in cash. It is appropriate to remember the axiom that “cash doesn’t kill you, mistakes kill you!”

Top Picks

BMO Equal Weight U.S. Bank (CAD-Hedged) Index ETF (ZUB.TO)
About 60 per cent regional banks as well as large caps like Wells Fargo, City and JP Morgan.

Horizons BetaPro S&P 500 Inverse ETF (HIX.TO)
It’s to be used as a hedge against volatility in U.S. and Canadian markets. Not held.

Horizons Active Floating Rate Bond ETF (HFR.TO)
It has little volatility.
 

Past Picks: September 24, 2015

Questrade Russell U.S. Mid-Cap Value Index ETF Hedged to CAD (QMV.TO)

• Then: $18.18
• Now: $20.08
• Return: 10.45%
• TR: 11.47%

SPDR S&P Mid-Cap 400 ETF (MDY.N)

• Then: $252.70
• Now: $279.35
• Return: 10.55%
• TR: 12.14%

Vanguard Mid-Cap ETF (VO.N)

• Then: $118.17
• Now: $128.00
• Return: 8.32%
• TR: 9.98%

Total Return Average: +11.19%
 

Website: jchood.com

CORRECTION: Jerome Hass' Past Picks
BNN regrets the errors in the calculations of Jerome Hass’ Past Picks. For the updated returns on his pair trades, click here.