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Michael Bowman.

Michael Bowman is executive vice-president and portfolio manager at Wickham Investment Counsel Inc. His focus is North American large caps and ETFs.

Top Picks:

Guggenheim Spin-Off ETF

A spin-off is where a parent company distributes 100 per cent of its ownership interests in a subsidiary to its existing shareholders. It is often sold once it is distributed without regard to price or fundamentals. This depresses the stock initially but they usually outperform the market going forward due to a number of reasons. These are generally good businesses at favourable prices. The ETF is composed of 24 securities that have been spun-off within the past 30 months but not more recently than 6 months. Twenty-six percent of the ETF is consumer discretionary companies and 21 per cent industrials. Beta is 0.97, PE 11.7 and Alpha is 9.08.

Powershares Buyback Achievers Portfolio ETF

Companies in this ETF must have repurchased at least 5 per cent of their outstanding shares during the trailing 12 months. The portfolio is balanced quarterly. Taking a cue from supply and demand, if the same amount of money is chasing a smaller amount of shares, share prices should increase. Insiders know more about the fundamentals of their firm than the general public and these insiders can influence the price of the stock by timing stock buybacks. By investing in companies that shrink the float, investors can essentially invest along with people who possess the best knowledge of their companies. PE is 15.84. Consumer discretionary is 34 per cent, financials 20 per cent.

Market Vector Gaming ETF

Macau, on China's west cost, surpassed Las Vegas several years ago as the largest gambling market worldwide. Macau took in $38-billion (U.S.) in gambling revenue in 2013. Forecasts point to a 20-per-cent increase in annual growth for Macau casinos. It is an industry driven by a growing worldwide middle class with increasing disposable income. Companies must make 50 per cent of revenue from gaming. Wynn, Sands China, Las Vegas Sands and Galaxy make up 34 per cent. 43 per cent U.S., 16 per cent China.

Past Picks: FEBRUARY 28, 2013

Select Sector Technology SPDR Fund

PAST COMMENTARY: Tech stocks earnings in the 4th quarter beat analyst's estimates 82 per cent of the time, but the tech sector has advanced half as much as the S&P 500. Apple is the cheapest it has been in 12 years. If it was trading at the same PE as the S&P it would have to rise 41 per cent. Apple has $137-billion in cash. This ETF is 17.6 per cent Apple. Besides Apple, there are 79 other tech companies. The ETF has very strong support at $27.

Then: $29.63; Now: $35.09; Total return: +20.69%

iShares Gold Bullion ETF

PAST COMMENTARY: This is a purely technical trade. Gold has been at $1,530 or so last year and the year before suggesting the metal has strong support at that level.

Then: $14.09; Now: $11.26; Total return: -20.09%

Consumer Staples Select ETF

PAST COMMENTARY: The companies in this ETF possess defensive characteristics and have benefits over other types of companies. They are not affected by changes in spending patterns, and they manufacture low-priced items used every day. These companies can successfully raise prices and many of their products have brand power. Since wants and needs tend to be similar world-wide, emerging markets offer substantial growth opportunities.

Then: $38.09; Now: $40.95; Total return: +10.26%

Total Return Average: +3.62%

Market outlook:

The recent selloff in both emerging and developed markets has many components, including worries about the U.S. Fed tapering, perhaps an overvalued equity market, and the perceived risks about a Chinese hard landing. The pullback has been overdone and simply stated, equities will continue to recover and advance.

Emerging markets have been underperforming for a few years now and this recent dip is smaller than last summer's swoon. While we may continue to see emerging market weakness, many of the headline worries appear to be exaggerated.

The recent data suggesting that the U.S. economy is slowing is probably nothing more than bad weather. While we are never supposed to blame the weather, my back hurts from shovelling. As for earnings, 55 per cent of those S&P 500 companies that have reported have beaten expectations. The investing business can be very fickle. While we all anticipated a pull back, many are now freaked by it and preparing for another bout of Armageddon. For those who like to buy low and sell high, we are glad of burps such as this. The DJIA has gained 90 per cent in the past 5 years, and has also suffered through 19 pullbacks of 5 per cent or more. In short, pull backs happen. Let's all get past it.