Mike Newton, portfolio manager & director, The Newton Group, ScotiaMcLeod

FOCUS: North American large caps and ETFs

Market Outlook:

One word that scares every investor is “systemic”. Systemic risk refers to the risks imposed by interlinkages and interdependencies in a system or market, where the failure of a single entity or cluster of entities can cause a cascading failure. In today’s framework, the speed of this current oil price crash is more important than the magnitude of this drop. The rapidity alone causes economic dislocation and political uncertainty, which puts nerves on edge and currencies and bonds in a tizzy. After a long period of relatively coordinated central bank policies and remarkably low volatility, the macro scene is becoming more dynamic. Diverging forces are pulling stocks in opposite directions. In this confusion, great growth companies can be delivered into investors hands at attractive prices, but keep in mind that much can go unexpectedly wrong in a relatively short period of time. Traditional portfolio approaches need to be re-visited in the event that dislocation and systemic risks ignite.

Top Picks:

Canadian National Rail (CNR.TO)
Starbucks (SBUX.O)
Tesla Motors (TSLA.O)