Jul 6, 2023
The Canadian stock market is 'dirt cheap' right now: David Rosenberg
, BNN Bloomberg
Fixed income, cash or equities: Rosenberg and Devlin weigh in on investing in current environment
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Investors looking to put their money to work in a heightened interest rate environment could find opportunities in the Canadian equity market, bonds, and cash, one Bay Street veteran advised.
In an interview with BNN Bloomberg’s Jon Erlichman on Thursday, David Rosenberg, founder and president of Rosenberg Research, said the S&P/TSX Composite Index is rewarding investors with the highest yield globally.
“The all in equity yield in the TSX is 16 per cent. It’s one of the highest in the world,” he said.
“For people that have been involved in the U.S. market, start bringing some money home in the Canadian market — it’s dirt cheap.”
Another strategy Rosenberg advised to investors was to park their money in cash holdings, which he says is perfectly appropriate during an elevated interest rate environment.
“I know people will say well it’s five per cent (return on cash holdings), and look at what the Nasdaq 100 is doing. Well — think about five per cent last year when the market was down almost 20 per cent,” he said. “Have some dry powder and get paid for it — to me that’s just common sense.”
One other corner of the investment world Rosenberg has turned to during this time is long-term bonds, especially as we head into a possible recession, he said.
Another expert agrees with this strategy.
“I like sticking to a recession hedge -- which is government bonds,” Ed Devlin, founder of Devlin Capital and former head of Canadian portfolio management at PIMCO, said in an interview on Thursday.
Devlin noted that both the equity markets and credit markets (such as corporate bonds), have not yet adjusted to high rates and for this reason he prefers to stick to cash and government bonds for safety.
“I’d keep my cash somewhere between cash and 10-year government bonds,” he said.
In an interview with BNN Bloomberg’s Jon Erlichman on Thursday, David Rosenberg, founder and president of Rosenberg Research, said the S&P/TSX Composite Index is rewarding investors with the highest yield globally.
“The all in equity yield in the TSX is 16 per cent. It’s one of the highest in the world,” he said.
“For people that have been involved in the U.S. market, start bringing some money home in the Canadian market — it’s dirt cheap.”
Another strategy Rosenberg advised to investors was to park their money in cash holdings, which he says is perfectly appropriate during an elevated interest rate environment.
“I know people will say well it’s five per cent (return on cash holdings), and look at what the Nasdaq 100 is doing. Well — think about five per cent last year when the market was down almost 20 per cent,” he said. “Have some dry powder and get paid for it — to me that’s just common sense.”
One other corner of the investment world Rosenberg has turned to during this time is long-term bonds, especially as we head into a possible recession, he said.
Another expert agrees with this strategy.
“I like sticking to a recession hedge -- which is government bonds,” Ed Devlin, founder of Devlin Capital and former head of Canadian portfolio management at PIMCO, said in an interview on Thursday.
Devlin noted that both the equity markets and credit markets (such as corporate bonds), have not yet adjusted to high rates and for this reason he prefers to stick to cash and government bonds for safety.
“I’d keep my cash somewhere between cash and 10-year government bonds,” he said.
