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BNN Market Call

3 top picks from Burgeonvest’s John DeGoey Add to ...

John DeGoey is vice-president and associate portfolio manager at Burgeonvest Bick Securities. His focus is on personal finance and ETFs.

Top picks:

Horizons Auspice Broad Commodity IDX ETF
Broad commodities are possibly the best diversifiers available to retail investors. This is a new product with a leading manager (Auspice) that should improve the risk-adjusted returns of nearly any portfolio when used judiciously.

BMO S&P/TSX Equal Weight Global Metal (Hedged-CAD) ETF
Base metals have been hit hard over the past six or eight months. This is a classic “buy low” story with diversification benefits.

iShares S&P/TSX Capped Materials Index Fund
This is also a classic “buy low” story. While broadly diversified among a number of materials, this has a large exposure to gold, which has been hovering at about $1,600 (U.S.) an ounce lately.

Past picks: May 01, 2012

Vanguard MSCI Canada Index ETF
Then: $25.43
Now: $26.63
Total return: +6.29 per cent

Vanguard MSCI U.S. Broad Market Index ETF (CAD-hedged)
Then: $28.11
Now: $31.19
Total return: +12.62 per cent

Vanguard MSCI EAFE Index ETF (CAD-hedged)
Then: $25.92
Now: $30
Total return: +18.50 per cent

Total return average: +12.47 per cent

Market outlook:

Owing to my beliefs in both market efficiency and modern portfolio theory, I maintain that no one can reliably forecast market moves or time the changes in market sentiment or direction. People should focus on setting an asset allocation that is suitable for them and then re-balancing their mix as circumstances warrant. They should do so using products that are cost effective, tax-effective (that is, have a low turnover) and broadly diversified. The time and money spent in picking stocks, picking actively managed mutual funds and timing market movements is almost certain to be wasted.

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