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Market Outlook The market is pessimistic following comments from the Fed yesterday about how long the market may take to recover, fiscally and monetarily. Add to that health experts views that re-opening the US economy may be challenged are causing a pause in the market. She has certain stocks that are defensive in nature. She is avoiding deeply cyclical sectors, like oil and gas. She likes companies that have strong balance sheets to better survive an economic down turn. Technology stocks have participated during this recent rally, but they are too expensive to buy into now. She would recommend waiting to buy in on a pullback.

Time to step in? If your time horizon is less than 1-2 years, you should be staying out of stocks in general. Canadian banks index is down 24% relative to only 13% for the TSX. Bank credit loss provisions will increase and next earnings will reflect losses from April. You may want to begin establishing a position in stages to allow a further buy in on a further pullback. Then buy in chunks as you get a better sense of a recovery.

China exposure? All the Canadian life companies reported earnings last week. As they collect premiums up front and invest in bonds, etc. until they need to payout, they are now at risk to losses on those investments. She feels MFC is emerging from this much better than back in 2008 and thinks the balance sheet is much stronger. She owns it and will continue to do so. Their Asian market exposure offers a great long term opportunity.

They are a senior gold producer operating in low risk regions. They are not reliant on just a few mines. She does not have much gold exposure their portfolios, but this would be a good one to hold.

Long term hold? They own this one. At current prices levels in the mid-$40s it is a good buy. They have a long term view and their CEO has had a recessionary view of the economy for the past several quarters. She thinks they will use a market down turn as an opportunity. When they reported last week, they mentioned a 2018 mall acquisition with the intention to re-purpose it to multi-purpose use. In a world of low or negative interest rates, holding hard assets is the way to go. She would be a buyer here.

Exposed to LT care? They own this one. As there have been deaths in long term care units, there is concern. Their level of care is very high to residents. As most units are in lockdown presently, their occupancy is declining. This will be difficult for senior housing for sure. She trusts their protocols for residents and employees. They will continue to hold.

They do not own ALA. When they bought a Washington utility it took time to re-balance the portfolio. If you own it, you could continue to do so. A good investment if you are looking for utility exposure.

(A Top Pick May 14/19, Down 28%) They still it own as one of two pipeline holdings. They were active mid-March as COVID began and oil prices collapsed. They cut their discretionary capex by $4.5 billion, of which $1 billion will be cut this year. Recent earnings reported were fine and they have continued guidance at the lower end of the range. Take or pay contracts are good. Dividend payout ratios are about 60%. Yield 7.5%

(A Top Pick May 14/19, Up 25%) They have held this for years. Their diagnostic division has developed four different COVID testing products, including tests for antibodies. Their recent earnings reflect delays in device growth, which she was not surprised with. However, the diagnostics division is ramping up and benefiting with all the upcoming test requirements. She has been adding to portfolios around $90.

(A Top Pick May 14/19, Up 48%) They continue to hold this. They have benefited from the work-at-home trend. This trend may continue after COVID. Office 365 and their cloud services will all benefit. However, at this point it is too expensive to buy. They hold about $9 per share in net cash. She would buy about 10-15% lower.

A company they own. The defense segment will be a very defensive holding. Their aerospace segment will suffer as their parts will in less demand. Also, new orders are likely to slow. The company is well managed with a strong CEO and balance sheet. They will continue holding it.

Buy more? They own this one and have for a number of years. They have continued to buy around $52-$53. She thinks the dividend is safe and will continue to grow. Yield 3.5%

In the quick-serve restaurant space they have done well with drive thru business still doing well. More traffic will return, but they will need to make changes in seating first. A high quality name.