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

Focus: North American large caps
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MARKET OUTLOOK
There is an adage, “Don’t believe everything you think,” and this may well be one of those times. The U.S. has elected Donald Trump, the self-styled “king of debt,” a game-changing event and a discontinuity from the administration of the past eight years. The cornerstone of the new economic policies is a more proactive fiscal approach to the economy, centering on three levers: 1) less Fed stimulus and higher interest rates, 2) cutting taxes and 3) infrastructure spending and energy. While details are worse than scarce, energy may no longer be a whipping boy, and some of the desperately-needed infrastructure spending may finally be initiated. In the short to intermediate term, all this sounds like a stronger U.S. economy with rising rates and focused spending intent.

It also sounds like a higher U.S. dollar, due in part to higher interest rates but also a stronger economy. This should be positive for the financial sector, which needs higher interest rates to improve their somewhat skinny profitability. None of this is good for the short- to intermediate-term outlook for gold bullion prices.

If you think that I have slipped a cog in my cognitive machinery, which for years has been pointing out the dangers of the massive U.S. debt load, I agree! But the election of Trump is a total about-face, and for the next while we have to play the hand we are dealt, not what we would like it to be.

TOP PICKS

BANK OF AMERICA (BAC.N)

MANULIFE FINANCIAL (MFC.TO)

CHICAGO BRIDGE AND IRON (CBI.N)
 

PAST PICKS: JANUARY 26 2016

TELUS (T.TO)

• Then: $37.64
• Now: $41.86
• Return: +11.21%
• TR: +14.90%

ENBRIDGE INCOME FUND (ENF.TO)

• Then: $27.84
• Now: $34.50
• Return: +23.92%
• TR: +30.95%

BARRICK GOLD (ABX.TO)

• Then: $13.40
• Now: $19.93
• Return: +48.73%
• TR: +49.48%

TOTAL RETURN AVERAGE: +31.77%