Darren Sissons, Partner & Portfolio Manager, Campbell, Lee & Ross Investment Management
Focus: Global & technology stocks
Top picks: Amazon.com, Shell Plc, Visa
MARKET OUTLOOK:
Geopolitics was a major 2025 catalyst. We expect a similar politics-driven playbook in 2026. Markets surprised to the upside in 2025 despite significant geopolitical turmoil.
While tariffs and tariff reduced demand should have adversely impacted global market indices, a flight to safety, the highly stimulative U.S. budget deficit and artificial intelligence (AI) were collectively a panacea for geopolitical risk.
Consequently, AI exposures and gold rallied as did financials. However, major economies increasingly experienced economic strain as unemployment spiked and consumer credit metrics deteriorated i.e., bankruptcies and loan defaults. Further, the weak Canadian Dollar positively impacted returns on non-Canadian holdings.
Senate elections are scheduled for November. Typically, an incumbent party’s with control of both the House and Senate spend strongly into the election cycle to avoid losing control of both houses, which would turn U.S. President Donald Trump into a lame duck. Further, in May the Trump Administration releases its 2026 budget. Like 2025, I expect a high single digit deficit, increased defense spending, and further corporate investment. Collectively, these spend increases will positively impact markets.
Looking forward, mining and metals look somewhat vulnerable to profit taking given their strong 2025 rally. Financials should be supported by budget deficits and spending noted above as should the defense sector. AI continues its positive momentum. Counter tariff measures and policy changes globally will be stimulative for capital goods, and infrastructure investment. A wave of bond redemptions given lower interest rates will drag on portfolio returns so active fixed income management will be critical.
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TOP PICKS:
Amazon.com (AMZN NASD)
Amazon.com operates three major business: U.S., International and AWS. The former two encapsulate the retail and media businesses. The latter provides exposure to artificial intelligence, Generative AI, and data centre economics.
Commercially, AWS offers leverage to high growth and high margin data storage, processing, and Big Data. AWS will continue to be the major engine of earnings growth.
Amazon lagged its large capitalization peer group recently, which has provided an attractive entry level.
Revenue and Net Income grew at a 10-year annual average rate of 19.5 per cent and 59 per cent, respectively.
Shell Plc (SHEL NYSE)
Shell is a growing dividend currently yielding 4.0 per cent.
A compelling valuation given the sector is deeply out of favour, a rising earnings profile with growth catalysts including LNG; upstream projects in Egypt, Gulf of Mexico, and Nigeria; and growth initiatives in chemicals and low carbon businesses.
Conservative capital allocation coupled with a cost savings program that has already reduced costs by US$3.9 billion
Strong free cashflow generation drives the annual buyback program, which averaged a five per cent share count reduction since 2021.
Visa (V NYSE)
A best-of-breed payments company positioned to benefit from rising prices and inflation.
Its dividend currently yields 0.70 per cent and has grown at an annual average rate in Canadian Dollars of 16.2 per cent for 10 years.
It has an attractive global footprint with deeply entrenched market leading positions in the U.S., Asia, Europe, and an emerging markets footprint including the high growth Chinese market.
Revenue and net profit have grown at a ten-year annual average of 10.2 per cent and 13.0 per cent respective.
| Disclosure: | Personal | Family | Portfolio/Fund |
|---|---|---|---|
| AMZN NDAQ | Y | Y | Y |
| SHEL NYSE | Y | Y | Y |
| V NYSE | Y | Y | Y |
PAST PICKS: MARCH 4, 2025
Canadian Apartment REIT (CAP-U TSX)
Then: $41.25
Now: $39.26
Return: -5%
Total Return: -2%
Franco-Nevada (FNV TSX)
Then: $206.79
Now: $325.57
Return: 57%
Total Return: 58%
Microsoft (MSFT NDAQ)
Then: US$388.61
Now: US$480.00
Return: 24%
Total Return: 24%
Total Return Average: 27%
| Disclosure: | Personal | Family | Portfolio/Fund |
|---|---|---|---|
| CAP-U TSX | N | N | N |
| FNV TSX | Y | Y | Y |
| MSFT NASD | Y | Y | Y |
