I recently attended HollisWealth’s 10th annual Year Ahead Investment Conference in Miami, Florida featuring some of North America’s top investment minds.
The event was hosted by HollisWealth’s Private Client Research group and its purpose was to showcase the viewpoints of industry experts, including, Scotia’s VP of Economics, Derek Holt; Scotia’s Commodity Market expert, Patricia Mohr; Dynamic’s Chief Investment Strategist, Myles Zyblock; and two sector analysts from Scotia Capital. In addition, I took in two panel discussions that featured leading PMs and strategists, and heard from distinguished keynote speaker Barry Ritholtz, who presented insights on behavioural economics.
The speakers discussed a range of topics and some of my key takeaways included the following:
• The road ahead is going to be a bumpy, volatile ride. The long term, patient money that is in the market for the right reasons has the potential to partake in attractive value opportunities.
• Sluggish domestic growth as a result of the decline in energy prices has made the Bank of Canada more dovish in its monetary policy outlook, which could possibly place additional downward pressure on the Canadian dollar.
• The U.S. dollar, from a financial markets perspective, is a key theme to watch. This is because currency translation effects are material for American corporations that generate a significant amount of their revenue abroad, a higher USD puts more pressure on commodity prices, and a strong greenback creates stress for emerging markets.
• The U.S. economy should continue to show healthy levels of growth. A strong labour market, increasing consumer confidence and significantly lower household debt as a share of after-tax income will continue to be positive tailwinds.
• A stabilization of oil prices would do a great deal to boost Canadian stock prices. 2016 is expected to be a transition year for commodities given there may be very sharp supply-side cuts. Demand for commodities in China is still growing, especially in base metals, but the market seems to think otherwise.
The consensus opinion at the conference is that we are in an environment where growth is scarce and where market volatility is elevated. Stock prices may be a bit elevated given the slowing levels of growth, but most of the experts I heard from at the conference agreed that a prudent investment approach involves having a bias towards quality across all asset classes. This includes favouring high-grade corporate bonds and the shares of larger companies with organic growth, successful management teams, low levels of debt and earnings stability.
President, HG Partners Limited
Director, Private Client Group &
Senior Financial Advisor,
HollisWealth Advisory Services Inc.
This article was prepared solely by Howard Goodman who is a registered representative of HollisWealth Advisory Services Inc. (a member of the Mutual Fund Dealers Association of Canada and the MFDA Investor Protection Corporation). The views and opinions, including any recommendations, expressed in this article are those of Howard Goodman alone and they are not those of HollisWealth Advisory Services Inc.
HollisWealth is a trade name of HollisWealth Advisory Services Inc. ® Registered trademark of The Bank of Nova Scotia, used under license.
HG Partners Limited is an independent company. Scotiabank companies have no liability for activities outside of HollisWealth.