Today, Eric Nuttall and John Hood commented about whether IEMG-N, ZDM-T, VGRO-T, ENCC-T, XEF-T, CAR.UN-T, PMIF-T, CWW-T, XLE-N, ZWE-T, XIC-T, HXT-T, ZWC-T, STEP-T, FRAC-N, TCW-T, BXE-T, PUMP-N, VII-T, CPG-T, ARX-T, IBR-T, PONY-T, WPX-N, TCW-T, FMSA-N, SPE-T, BIR-T, TOG-T, CJ-T are stocks to buy or sell.
Market Outlook. Looks at this kind of sell-off as a correction well needed. It had to come. The question is whether or not this is the beginning of a bear market. He thinks it is not. Because the US economy is growing, profits growing at 18-19% with the tax cuts. The problem is that when investors see this type of volatility they tend to catastrophize. Interest rates are still historically low. What is really wrong? We can expect further weakness from here, we can also expect some bumps like today. Be calm, take the dog for a walk.
What is a cost-effective way to protect my portfolio from a downturn? Very simple way. Go to www.m-x.ca which is the Montreal exchange. You will see pages of stats. Pick a month and a strike price and go from there. Now with more volatility they are a little more expensive. Buy put options. You might go to slightly out of the money and they are less expensive. The problem with options in Canada is that there is not that much volume.
Covered calls doesn’t offer too much downside protection, is there a point in a downturn where you get out and take losses? Interesting question. He would trim positions. The risk is that there is more risk on the downside than you have growth on the upside. In terms of exiting entirely, he wouldn’t do it.