Keith Richards, president and chief portfolio manager, ValueTrend Wealth Management

FOCUS: Technical analysis 

MARKET OUTLOOK:

The bottom line is economics 101: supply and demand.

On the supply side, years of modern monetary theory – money printing, easy rates and high taxation. We have a high supply of money flowing through both the U.S. and Canadian economies. On the demand side, there is a super tight labour market with increasing demand for housing, goods and services through immigration and prior supply constraints.

The result is sustained inflation. My guess is that the two per cent consumer price index (CPI) goal is not going to happen any time soon. Inflation is being stoked further by the circular pattern of record numbers of striking union workers demanding higher wages. Sure, this temporarily creates more spending power, but that money goes back into the system and also increases product prices as labour costs are passed on to consumers. This is all adding to spiralling inflation.

Meanwhile, we have millennial homebuyers who bought during the post-COVID-19 housing boom. Many are in three-year terms at three per cent. These terms will be coming due in the next year at six per cent, piling that management cost increase onto their higher gas and grocery bills. How much discretionary spending does this leave them? Less spending by consumers equals slower economic growth.

The combination of the above is called stagflation. The good news is that smart investors can make money in this environment. How so?  Hard assets. 

  • Sign up for the Market Call Top Picks newsletter at bnnbloomberg.ca/subscribe
  • Listen to the Market Call podcast on iHeart, or wherever you get your podcasts

 

TOP PICKS

Keith Richards' Top Picks

Keith Richards, president and chief portfolio manager at ValueTrend Wealth Management, discusses his top picks: CASH, Hudbay Minerals, and BMO MSCI China ESG Leaders ETF.

Cash

Hudbay Minerals (HBM TSX)

BMO MSCI China ESG Leaders ETF (ZCH TSX)

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
CASH Y Y Y
HBM TSX Y Y Y
ZCH TSX Y Y Y

 

PAST PICKS: August 1, 2023

Keith Richards' Past Picks

Keith Richards, president and chief portfolio manager at ValueTrend Wealth Management, discusses his past picks: iShares TSX Global Gold ETF, Nutrien, and Wheaton Precious Metals.

iShares TSX Global Gold ETF (XGD TSX)

  • Then: $17.42
  • Now: $17.01
  • Return: -2%
  • Total Return: -2%

Nutrien (NTR TSX)

  • Then: $89.10
  • Now: $88.68
  • Return: -0.4%
  • Total Return: -0.4%

Wheaton Precious Metals (WPM TSX)

  • Then: $58.20
  • Now: $58.03
  • Return: -0.3%
  • Total Return: 0.1%

Total Return Average: -1%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
XGD TSX Y Y Y
NTR TSX Y Y Y
WPM TSX Y Y Y