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Stock Opinions by John Hood

COMMENT
Nothing is on sale in this market since last November when stocks jumped sharply. Good value is hard to find. Stocks will go higher, a far cry from March 2020. Today, we're seeing a 2% dip--a retail investor shouldn't chase it. A 10% dip gets his attention, but at 15% he starts buying. He likes Canadian and American banks, because interest rates will slowly increase and raise the net interest margins for the banks. Also, the banks have a lot of capital held over from the pandemic. Third, the economic recovery is a tailwind. His covered calls in US banks is up 50%, surprising even him. The job outlook looks positive, because the end of government supports will force those to find work.
Unknown
BUY
An ETF for a TFSA It tracks the S&P 500, hedged against a decline in the US dollar. It's a core position for him. Solid. Also, ZWB, a covered call on Canadian banks, yielding 5.5%, a surrogate for the Canadian economy.
E.T.F.'s
BUY
Nothing wrong with this. Tech is important to own, though will be volatile.
E.T.F.'s
BUY
An ETF for a TFSA ZWB, a covered call on Canadian banks, yields 5.5%, and is a surrogate for the Canadian economy.
E.T.F.'s
BUY
It covers the TSX, very comprehensive, a core Canadian holding. He's very overweight in the US, but for the TSX, he owns this.
E.T.F.'s
DON'T BUY
No, investing in China and Chinese tech is not good now. The government has so much influence over markets with crackdowns on real estate and gambling stocks, and the country's stocks lack transparency. Everything is seen through a political lens. He avoids Chinese stocks, period.
E.T.F.'s
HOLD
If you already own this, hang on. Though, for new clients, he will invest in the S&P, because you must own this or similar S&P ETFs. The S&P has run up so much, so he doesn't add if he already owns VFV.
E.T.F.'s
DON'T BUY
As the price natural gas rises The only problem is that HNU is leveraged. He doesn't like anything that is leveraged.
E.T.F.'s
COMMENT
Is the 6.5% dividend too good to be true? Is there a return of capital portion in the yield? He doesn't believe so. On all BMO covered call ETFs you're adding 2-2.5% to the dividend to total 6.5%. No, there are no return on capital issues.
E.T.F.'s
PAST TOP PICK
(A Top Pick Nov 09/20, Up 14%) It was disappointing many months after ETFs rose while VGG did nothing since November. Only in the last 3 months has this moved up. It's a conservative play, holding dividend growers.
E.T.F.'s
PAST TOP PICK
(A Top Pick Nov 09/20, Up 20%) The yield has done well, paying 6.5%. Owns it for many accounts. Still likes it. The covered calls are treated as capital gains.
banks
PAST TOP PICK
(A Top Pick Nov 09/20, Up 21%) He likes it, likes this niche though ZUH is diversified in hospital care and big pharma.
0
DON'T BUY
Are you investing or gambling? Some invest in hot sectors like cannabis or blockchain without understanding them. He's never owned this, because it's gambling. He avoids the sector for the same reason.
E.T.F.'s
DON'T BUY
Pays a 4+% dividend. Preferreds are susceptible to changing in interest rates. This is a rate-reset, so even if interest rates rise, ZPR can reset its payout. Generally, he doesn't like preferreds, and would rather buy covered calls which pays a slightly higher return.
E.T.F.'s
DON'T BUY
For the long term The only problem is that utility stocks rely on government contracts, so are vulnerable to an increase in interest rates; they can't adjust quickly. So, if rates rise, utilities will decline even though the dividends now look attractive.
E.T.F.'s
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