COMMENT
US over Canada, growth over value.

Recent economic data out of Canada shows that our economy is decelerating at a rapid pace. With the bank earnings and potential credit issues, he prefers the US market over Canada's at this point. If the BOC does move ahead with a rate cut in June, as is highly anticipated, that could change his viewpoint. Markets typically will perform pretty well after a rate cut.

But for now, he's more inclined to be in the growth-oriented industries, specifically tech and data centres in the US. Less favourable on the value sectors such as financials and energy that predominate Canada.

COMMENT
A miss on earnings or guidance is a great buying opportunity.

He's not sure if it's a lower-volume May to September kind of trading environment, but while we're seeing pretty good results from major companies, the market just hasn't loved some of those results or the forward guidance. See his Top Picks for a company that had good results, but has come down quite a bit.

You have to pick through in this stock picker's market, looking for undervalued opportunities in names that have moved too much on not-so-bad earnings. Volatility is there a fair amount. Keep your eye peeled for opportunities that could appreciate fairly significantly.

COMMENT
Stocks vs. ETFs

It can vary client by client. At certain times, you just don't want an individual to have the risk of owning a stock, where you can see 10-15% moves over the course of a day or week. ETFs are better for broad-market exposure where you're trying to get specific access to an industry or a market. You can then use individual stocks to supplement that exposure, or for companies that you think are going to significantly outperform the market.

BUY
Tech ETF not dominated by tech's Magnificent 7?

This is one he uses. Made up of more mid-cap tech companies, not the giants or mega-caps. Moves really well when the market's moving up. Gives you diversified exposure to companies that maybe have a bit more pop in them. 

WAIT

Disappointing. Squarely in consumer discretionary. Even though it's wholesaling more to grocery retailers, end-consumer is tight on cash right now. Solid, but you don't want to be here right now. 

BUY

Good if you're buying in USD. He prefers the market-weighted over the equal-weighted right now. Large and mega-caps will continue to perform well. 

His mid-term target for the S&P 500 is 5500, then maybe a pullback in September-October, and then go on to hit 6000 in the first quarter of 2025. Good opportunities in it, even though the market's performed well. Good core holding.

BUY

VSP is a hedged version for the S&P index, for those wanting exposure to the S&P but using Canadian dollars. XSP is fairly similar. MER costs are quite low for both. He prefers the market-weighted over the equal-weighted right now. Large and mega-caps will continue to perform well. 

His mid-term target for the S&P 500 is 5500, then maybe a pullback in September-October, and then go on to hit 6000 in the first quarter of 2025. Good opportunities in it, even though the market's performed well. 

BUY

VSP is a hedged version for the S&P index, for those wanting exposure to the S&P but using Canadian dollars. XSP is fairly similar. MER costs are quite low for both. He prefers the market-weighted over the equal-weighted right now. Large and mega-caps will continue to perform well. 

His mid-term target for the S&P 500 is 5500, then maybe a pullback in September-October, and then go on to hit 6000 in the first quarter of 2025. Good opportunities in it, even though the market's performed well. 

WEAK BUY
Own covered call ETF or individual names?

Depends on whether you're looking more for growth (individual banks) or for income (ETF). Also depends on what bank you're looking at and your timeframe. The covered call generates a bit higher income, but that could limit upside a bit if banks are running up.

Recently, TD and BMO have disappointed. Might be a buying opportunity. 

WAIT

Issues such as money laundering. Will most likely remain in the penalty box for a while. It'll take a couple of quarters of good results and no headaches for the stock price to recapture where it was. Still a high-quality bank and business. Anytime there are issues, stockholders get concerned and some are going to head for the exit. Will be fine to own over the next couple of years. If you bought today, he wouldn't be surprised if price went down or sideways.

Not a huge fan of the banks right now, unless you're looking for income. Wait a month or two, and perhaps we'll see a bit of a rebound so you could make some capital growth on top of the dividend.

BUY

In a good space that favours growth over value, and the holdings in this one would be along those lines. You get the mega-caps as well as some of the smaller names, diversified across areas in the tech landscape. Good holding.

Anytime you hold growth, you're going to see some swings. Must consider your timeframe and what amount of volatility you're comfortable with. If you bought today and didn't look at it for 6-7 months, he'd be really surprised if you didn't see some upside.

WATCH

 Has recently disappointed. Might be a buying opportunity.  

DON'T BUY
For income?

When he owns something cyclical like an oil company, he's not generally trying to own it for income but, rather, for growth. For income, there are better strategies such as bank covered calls or utilities strategies. Oil is range bound, unless there's more geopolitical conflict, not a ton of upside in energy names.

Look elsewhere for income or growth. If you're really fond of the energy market and want to generate some income, you could go this route, but he'd do it differently.

DON'T BUY
Dividend sustainable?

Owning a company that's more cyclical is not owned for the dividend yield. You can find 6-7% dividend yields on companies that aren't as volatile. This one is fine, but tied to underlying commodity prices. The group hasn't performed exceptionally well.

If he's correct, dividend was cut in half earlier this year, now yielding about 6.5%. On the high end for the industry, as capex takes a lot funding. Once cut, he assumes they won't cut again, at least not right away.

PAST TOP PICK
(A Top Pick Jul 21/23, Up 47%)

Loves the theme of AI, chips, data centres, and servers. It's come down from a couple of months ago and traded sideways, another opportunity to get in. Next leg will be up and, hopefully, retake past highs. Super-comfortable with.