Robert McWhirter, president of Selective Asset Management
Focus: Canadian dividend and small-cap stocks
MARKET OUTLOOK
Economists at the International Monetary Fund forecast world economic growth in 2019 will be 3.3 per cent, a slowing of 0.3 per cent versus 2018. The trade war between the U.S. and China is a distraction that we believe will be resolved in the next few months, leading to improved investor confidence.
U.S. 10-year bond yields, which were 3.23 per cent in early November, declined to 2.35 per cent on March 27. However, they’ve risen to 2.55 per cent and appear headed to 2.75 per cent or higher.
The rise in bond yields has put pressure on the price of gold ($1,293). If gold goes below $1,28, its short-term target would be $1,200.
It’s a positive sign for the U.S. economy and forest products companies that the PHLX Housing Sector Index (HGX), which declined 38 per cent from its January 2018 peak of 369 to 228 basis points in December, has risen 35 per cent to 308 and appears headed back to that peak.
The price of oil continues to move higher, reflecting production uncertainties in Libya and Venezuela. Oil production and service stocks and their respective ETFs are also moving higher.
We expect North American equity prices to continue to move higher in the next 12 months.
TOP PICKS
BOYD GROUP INCOME FUND (BYD_u.TO)
Boyd provides auto body and auto glass repair services across North America. While not in our Canadian Dividend Strategy, it is a potential buy.
DOLLARAMA (DOL.TO)
Dollarama operates discount retail stores selling low-priced goods in Canada. Dollarama is a potential buy candidate for our portfolio.
PASON SYSTEMS (PSI.TO)
Pason provides data acquisition, wellsite reporting and remote communications, enabling collaboration between oil and gas drilling rigs and the office. It’s a potential buy, but not currently in our portfolio.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| BYD_u | N | N | N |
| DOL | N | N | N |
| PSI | N | N | N |
PAST PICKS: JULY 24, 2018
ATS AUTOMATION TOOLING (ATA.TO)
- Then: $19.05
- Now: $20.52
- Return: 8%
- Total return: 8%
CANADIAN PACIFIC RAILWAY (CP.TO)
- Then: $249.65
- Now: $284.70
- Return: 14%
- Total return: 15%
EMPIRE CO (EMPa.TO)
- Then: $26.47
- Now: $30.17
- Return: 14%
- Total return: 15%
Total return average: 13%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| ATA | N | N | N |
| CP | Y | N | Y |
| EMPa | N | N | N |
WEBSITE: selectiveasset.com
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