Ross Healy, chairman at Strategic Analysis Corporation and associate at MacNicol & Associates Asset Management

Focus: North American large caps
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MARKET OUTLOOK
Both the stock and bond markets are as high or higher than I have encountered in a very long time, and like many investors, advisors and asset managers, I am cautious and concerned as to the range of outcomes that are now possible. That is clearly a euphemism for observing that I, too, am suffering from height fright. To top all that off, a good number — too many for my own comfort — of the very largest cap stocks are extremely stretched in terms of their intrinsic values as well as their historical valuation ranges, not to mention their PE ratios, price/book ratios and other metrics. I have been here before, and the (eventual) outcome has never been pleasant.

Those who remain bullish observe that too many people are very nervous, and that alone suggests that stocks can move higher still. And with Chairperson of the U.S. Federal Reserve Board, Janet Yellen, in their corner, promising — if necessary — to be out there buying yet more bonds to keep the music playing and even buying such stocks as are necessary to maintain consumer confidence and the “feeling of wealth,” perhaps the bulls are right. The Fed has had a pretty good record of keeping things afloat (for perhaps longer than they should), but 2000 to 2002 and 2008 to 2009 show that when they are wrong, they are really wrong. Some cash holdings may well serve investors in the period ahead.

Finally, after a marvelous move, gold bullion (and gold stocks) is having a “rest” (another euphemism for “Ouch, my gold stocks are falling”). But central bank actions speak powerfully to the massive dilution of the value of money almost everywhere. Central banks hate gold price strength as it speaks to their incompetence in maintaining the purchasing value of money, but they are unable to stop as our politicians have no will to rein in spending and control government balance sheets. I remain bullish on bullion prices for 2017.

TOP PICKS

GOLDCORP (G.TO)

METLIFE (MET.N)

COMINAR REIT (CUF_u.TO)
 

PAST PICKS: OCTOBER 20, 2015

ALAMOS GOLD (AGI.TO)

• Then: $5.88
• Now: $9.63
• Return: +63.78%
• TR: +64.43%

POWER FINANCIAL (PWF.TO)

• Then: $31.74
• Now: $30.93
• Return: -2.55%
• TR: +2.45%

AMAYA (AYA.TO)

• Then: $29.01
• Now: $22.21
• Return: -23.44%
• TR: -23.44%

TOTAL RETURN AVERAGE: +14.48%
 

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