Brett Girard, chief financial officer and portfolio manager, Liberty International Investment Management
FOCUS: global stocks
Top Picks: Great-West Life, Verisk Analytics, CN Rail
MARKET OUTLOOK:
For markets to stabilize, we need clarity on which tariffs will become permanent, and which were merely part of a bargaining strategy. This will require negotiations among various political players, so it’s safe to say no one knows exactly how or when this will be resolved.
In this period of extreme uncertainty, investors should focus on the fundamentals of risk management. Start by reviewing your asset allocation. If you are five or more years away from retirement, opportunities to dollar-cost average into high-quality stocks are starting to emerge.
If you are less than five years from retirement or have already retired, you should hold a significant amount of fixed income. Over the past week, corporate and government bonds in balanced portfolios have performed as expected, with returns that are flat to slightly positive.
If you’re uncomfortable with concentration in any single stock or sector, avoid the knee-jerk reaction to make large trades. Instead, consider trimming positions gradually on up days.
Remember market volatility is a feature of equity markets allowing rational investors to buy at great prices. Over the last 75 years the average intra-year drawdown has been 14 per cent. More recently we have experienced greater than 20 per cent drawdowns in 2018, 2020, 2022 and now 2025.
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TOP PICKS:
Great-West Life (GWO TSX)
Diversified insurance and wealth management giant with operations in Canada, the U.S. and Europe. Many products on the shelf are long lived (life insurance, annuities) or locked in (employer pensions) so market volatility has less of an impact on the client. Dividend yield just under five per cent with an average growth rate of eight per cent over the last decade.
Verisk Analytics (VRSK NASD)
Leading global provider of data analytics, risk assessment, and decision support services, primarily for the insurance, healthcare, energy, and financial services industries. The recurring revenue heavy business model is well positioned to benefit from big data, AI and digital transformation as businesses and governments embrace automation and predictive analytics to find efficiencies.
CN Rail (CNR TSX)
Looking 18 months ahead it’s highly likely Canada will have a more permanent prime minister with a mandate to bring our resources to all of our trading partners. Rail continues to be the most efficient and environmentally friendly mode of transportation for moving bulk items over large distances. Should tariff driven inflation emerge, the replacement cost of a continental rail network will drive asset value higher. Meanwhile CN Rail hasn’t been this cheap on price-earnings basis at 17 times NTM since 2019 (ignoring the COVID-19 crash in 2020). Dividend yield currently 2.6 per cent- and 10-year dividend growth rate has been just over 10 per cent.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| GWO TSX | Y | Y | Y |
| VRSK NASD | Y | Y | Y |
| CNR TSX | Y | Y | Y |
PAST PICKS: April 22, 2024
Brookfield Corp (BN TSX)
- Then: $54.28Now: $68.00
- Return: 25%
- Total Return: 26%
NextEra (NEE NYSE)
- Then: US$65.31
- Now: US$65.93
- Return: 1%
- Total Return: 4%
Alimentation Couche-Tard (ATD TSX)
- Then: $77.76
- Now: $69.17
- Return: -11%
- Total Return: -10%
Total Return Average: 7%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| BN TSX | Y | Y | Y |
| NEE NYSE | Y | Y | Y |
| ATD TSX | Y | Y | Y |
