Andy Nasr, vice president and investment strategist at Sentry Investments

Focus: REITs, global equities and macro strategy
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MARKET OUTLOOK
We continue to believe that the U.S. and Canadian markets will offer superior risk-adjusted returns to investors. However, it remains very difficult to ascertain the impact that the U.S. Republican administration will have on economic growth, inflation and interest rates. The market is discounting a positive contribution from inflationary tax and fiscal spending policies that won’t come into focus until early 2017. While the Republicans have a majority in Congress, some of Mr. Trump’s initiatives may face resistance from fiscally-conservative members of Congress. Both equity and bond markets have begun to discount higher inflation expectations and rising interest rates, which is creating a buying opportunity in certain defensive sectors such as real estate and utilities. While the likelihood of a recession in the U.S. remains low, volatility may persist next year due to heightened political risk in Europe as well as the need to sustain growth and affect inflation in several global economies through accommodative fiscal or monetary stimulus. We continue to leverage our “house style,” which has produced excellent long-term returns, to find compelling equity and fixed-income investments in various geographies.

TOP PICKS

ALPHABET INC. (GOOGL.O)
The company has a strong foothold in online search, web-based advertising and cloud services. The valuation is compelling and we expect slower ad sales growth to largely be offset by increased demand for cloud services.  

NEWELL BRANDS (NWL.N)
Newell recently merged with Jarden and sells a variety of consumer products. We believe that earnings and free cash flow should improve materially due to the realization of deal synergies, an improvement in household formation and product rationalization.

LOBLAW (L.TO)
The company is the largest food and drug retailer in Canada and is trading at an attractive valuation. We expect strong free cash flow growth during the next few years, which can be used to repurchase shares, pay down debt and support dividend growth.
 

PAST PICKS: NOVEMBER 3, 2015

VISA (V.N)

• Then: $77.90
• Now: $79.27
• Return: 1.75%
• TR: 2.70%

WALGREENS BOOTS ALLIANCE (WBA.N)

• Then: $88.23
• Now: $83.92
• Return: -4.88%
• TR: -2.69%

ENERCARE (ECI.TO)

• Then: $15.48
• Now: $18.18
• Return: 17.44%
• TR: 23.74%

TOTAL RETURN AVERAGE: +7.91%