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Latest Stock Buy or Sell?

Today, Larry Berman CFA, CMT, CTA commented about whether JPM-N, G-T, SHOP-T, ZLH-T are stocks to buy or sell.

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Market. There may be a looming banking crisis here and in China. We are the two biggest countries at most risk from a consumer debt level. This is one reason that interest rates cannot go up a whole lot. The consumer is much leveraged to small increases in interest rates. He thinks the economy will slow a lot. We will see how the markets handle that this year. There is job growth in the US but not much growth in wages. There are pockets of inflation pressure building on the wage side.

Unknown
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ETF Diversification. Two or three products for diversification. VBAL-T, VGRO-T, VCNS-T. You have to know what your comfort level is and what category you fall into. In a retirement situation a balanced fund would fit the best. The cost on all of them is just 22 basis points. The question is if you can handle the ride. Bonds won’t protect us like they did in the past.

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We are heading for a recession as the next economic cycle and this may be the fear-of-missing-out stage. He would not chase things. Be more conservative. The BMO covered call ZWE-T – more than 6% yield. It should be a good holding for the next 6 years. ZWC-T is also good – more than 5% yield.

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HOLD

The withholding of tax is done before distribution. The ETF gets some rebates. Interest sensitive stocks that are low volatile have squeezed profit margins. Most of the time this is a good strategy but interest rates are rising so it does not mean it will not go down.

E.T.F.'s
DON'T BUY

One of the best growth stocks in Canada in the last year. This is a momentum investment. He is a value investor so it does not fit him. The 12 month target is $180.00 and we are at $190, so not a lot of optimism. A lot of this year’s news is already in the stock.

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BUY

He uses ETFs like GDX-N or ZGD-T, and G-T is a big part of both of them. We are getting some false alarms but this is a bit of a break out. Inflation pressures in the coming year would be good for this stock. Inflation numbers are what are going to drive gold this year.

precious metals
HOLD

He likes a couple of ETFs. KRE-N is regional banks and has broken out already. While revenues go up revenues should increase for banks but the profit margin is worse if the yield curve is flattening. There is a momentum trade on US banks right now, however. The yield curve could flatten further later this year.

Financial Services