James Thorne, senior portfolio manager and chief capital markets strategist, Caldwell Investment Management 
Focus: U.S. dividend stocks

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MARKET OUTLOOK:

The global economy and financial markets have just entered a period of profound change. The rise of populism and economic nationalism means investors must keep an open mind when positioning their portfolios for the future.

Investors need to realize that U.S. President Donald Trump means what he says. They need to quell their emotions and realize that the White House is focused on an agenda of national security, economic nationalism, and the deconstruction of the “administrative state.” He will not change and his policies have been presented consistently in his speeches. Canada needs to realize this. Investors need to build portfolios accordingly. Trump’s policies will be pro-growth and inflationary.

Political uncertainty in Europe and the rise of populism must be on everyone radar. Will Germany realize that unless they soften their stance on policies, populism will sweep over Europe? The big risk to markets is that policy makers around the world don’t take the rise of populism seriously and change policies accordingly.

We expect the Federal Reserve to raise rates two to three times this year, and feel that they’re way behind the curve and risk creating another bubble. As for Canada, the recovery in commodities prices masks an economy that is structurally weak. Canada isn’t competitive in manufacturing. We don’t believe that we’re in a new commodity super cycle. Thus, the acceleration present in the Canadian economy caused by the recovery in commodities will dissipate.

TOP PICKS:

STAR BULK CARRIERS (SBLK.O)

BANK OF AMERICA (BAC.N)

BANCO SANTANDER (SAN.N)

Disclosure Personal Family Fund/Portfolio
SBLK Y Y Y
BAC Y Y Y
SAN Y Y Y

PAST PICKS:  DEC. 9, 2016

CITIGROUP (C.N)

  • Then: $60.04
  • Now: $59.66
  • Return: -0.63%
  • TR: -0.32%

MACQUARIE INFRASTRUCTURE (MIC.N)

  • Then: $82.73
  • Now: $75.83
  • Return: -8.40%
  • TR: -8.40%

TAHOE RESOURCES (THO.TO)

  • Then: $12.64
  • Now: $11.50
  • Return: -9.41%
  • TR: -8.84%

TOTAL RETURN AVERAGE: -5.85%

Disclosure Personal Family Fund/Portfolio
C N N Y
MIC N N Y
THO N N Y

WEBSITE: caldwellinvestment.ca