Paul Gardner, partner and portfolio manager at Avenue Investment Management
Focus: REITS, bonds and dividend stocks

MARKET OUTLOOK:

After shakiness in the market this summer due to U.S. trade wars, Brexit and the view that the global economy was in recession, volatility has now receded and, as expected, we're now hitting all-time highs on the TSX. We believe that investor sentiment is very bearish and this latest stock market rally is one of the most detested. 

The bond market has also readjusted by selling off and now we are finding higher yield levels, though they're still very low from a historical basis. The occurrence of negative interest bonds is giving a lift to the precious metal markets. After this selloff, we believe bonds will stay in a narrow range until we find out what sticks more between growth or inflation.

Geopolitical risks from Saudi Arabia are helping sentiment in Canada’s oil patch. We believe that the energy sector is still cheap and has the opportunity to rally into the fall. Commodities should stay bid into the fall and therefore I would expect a continued outperformance by Canadian markets versus its expensive U.S. peers.

TOP PICKS

BROOKFIELD PROPERTY PARTNERS (BPY-U:CT)

INTER PIPELINE (IPL:CT)

BAYTEX 6.625% 2022 (BTE:CT) 

PAST PICKS: NOV. 22, 2018

WPT INDUSTRIAL REIT (WIR/U:CT)

• Then: $12.59
• Now: $13.89
• Return: 10%
• Total return: 16%

YELLOW PAGES CONVERTIBLE  8% 2022 BONDS

• Then: $96.19
• Now: $101.70
• Return: 6%
• Total return: 14%

BCE INC. (BCE:CT)

• Then: $55.79
• Now: $64.43
• Return: 15%
• Total return: 22%

Total return average: 17%