Gordon Reid, president and CEO of Goodreid Investment Counsel
FOCUS: U.S. equities
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MARKET OUTLOOK

Valuations are relatively rich, reflecting a very strong earnings backdrop and investor confidence that tax reform will be additive. The offset is that the economic cycle is maturing, with the Fed emboldened enough to be increasing interest rates. Recognize the late stages of the cycle and be ready to blend in more defensive positions into portfolios. Also, be true to your stated asset mix.

TOP PICKS

APPLE (AAPL.O)
Apple will benefit on a number of fronts in 2018. In addition to a major product cycle anchored by the iPhone X, the company will see a huge impact from the repatriation of foreign capital. While the phone continues to contribute over 60 per cent of their operating profits, this is a story about a rapidly growing pie. The services business now accounts for close to US$30 billion of revenue. Last purchased Dec. 2017 at US$170.

CITIGROUP (C.N) 
Management has done an excellent job in bringing this bank back to respectability. They have simplified the balance sheet, improved credit quality, and successfully passed stress tests to allow for a resumption of dividends and buybacks. As interest rates push higher in 2018, money centre banks will have the opportunity to expand margins. Combined with a continuation of compelling valuations we see Citigroup as a core holding. Last purchased Dec. 2017 at US$75. 

PIPER JAFFRAY (PJC.N) 
Strong markets are the fuel for the advancement of PJC’s stock price. In addition to excellent revenue growth in asset management services as well as capital markets business, management has kept a lid on expenses, leading to double-digit growth in earnings. Last purchased Nov. 2017 at US$61. 

PAST PICKS: DECEMBER 19, 2016

CALATLANTIC (CAA.N)

• Then: $34.65
• Now: $55.44
• Return: 60.00%
• Total return: 60.65%

CVS HEALTH (CVS.N)

• Then: $79.93
• Now: $72.47
• Return: -9.33%
• Total return: -6.98%

GOLDMAN SACHS (GS.N)

• Then: $239.07
• Now: $256.50
• Return: 7.29%
• Total return: 8.64%

TOTAL RETURN AVERAGE: 20.77%