Keith Richards, portfolio manager at ValueTrend Wealth Management

Focus: Technical analysis
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MARKET OUTLOOK
Do election years influence the stock market? Research suggests that election years can be volatile in the first half and bullish in the second half. Since 1996, the S&P 500 has reflected a correction or weak period during election cycles.

True to this trend, we did get some downward pressure on the markets from August to early November. According to both seasonal and electoral patterns, markets can move nicely after a November election. While it may not be a nice straight line up, the probability is that the final quarter of 2016 into the first half of 2017 will be strong. We’ve already moved a good chunk of our cash that we held over the summer back into the market. I expect to use any pullbacks as an opportunity to invest the rest into high-quality stocks in the coming days and weeks.

TOP PICKS

PARKLAND FUEL (PKI.TO)
Parkland distributes fuel to commercial and residential customers all over Canada and the U.S. The stock broke out of a trading range back in late August, got a bit overbought and has pulled back to its first level of support at $28. We view this pullback as a reasonable entry point opportunity, and bought it for the ValueTrend Equity Platform last week. We’ve held it in our ValueTrend Income Platform for about a year. The yield is around four per cent.

BCE (BCE.TO)
We sold this stock back in August at $63 per share, and wanted to re-buy it when it pulled back to its trendline. It’s recently done that. The current level of $58 to $59 is an attractive entry point for this stock. It’s another higher-yielding stock that we’ve added to the Equity Platform. We’ve held BCE in the Income Platform for a couple of years. The fact that we have traded BCE in and out provides some insight as to the different strategies of these models — that is, our Income Platform is more passive, while the Equity Platform is far more active.

AMAZON (AMZN.O)
The Trump victory resulted in a massive shift into industrials and materials. Yes, there will be infrastructure spending and all is good in those sectors, but the rotation out of and pullback in the real growth engines of the economy — namely the tech sector — is unjustified. The big tech stocks like Amazon, Microsoft and Google (all of which we own) are all technically attractive from their weekly chart trendlines. We view Amazon as one of the favourable stocks to buy on the pullback, and just entered into it last week.
 

PAST PICKS: OCTOBER 5, 2016

ISHARES JAPANESE FUNDAMENTAL INDEX ETF (CJP.TO)
Still own. The Nikki and this ETF broke out of a base after breaking its trendline. We’re not sure we’ll stay in the trade, but so far we are happy with the move.

• Then: $12.26
• Now: $12.98
• Return: 5.87%
• TR: 5.87%

FORMENTO ECONOMICO MEXICANO (FMX.N)
As noted on the last show, this very sideways trading stock can be bought in the mid $80s and must be traded out when it approaches $100 per share. We bought FMX at $88 and recently sold it at $98. We view the stock as a little risky right now, given the declining peso, but we will re-enter the stock if it manages to hold above $80 and the peso firms up.

• Then: $94.55
• Now: $82.15
• Return: -13.11%
• TR: -12.52%

CASH
 

TOTAL RETURN AVERAGE: -3.32%