Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.
David Rosenberg: It’s time to get bullish on Canadian and U.S. banks
The encouraging release of Pfizer’s COVID-19 vaccine data has revealed a light at the end of the tunnel for the pandemic, David Rosenberg writes with Marius Jongstra. In turn, a tailwind may emerge behind the beleaguered value stocks, with banks, in particular, being among the largest beneficiaries both in the United States and Canada.
To be sure, there is the potential for more short-term pain if no new stimulus is provided out of Washington, but a clearer end to the pandemic will allow banks to reduce credit loss provisions and that flows into future profits. Another reason to consider being bullish on North American banks is that valuations have rarely been cheaper. Read more here.
More from David Rosenberg: Pfizer’s promising COVID-19 vaccine is a potential game changer for the economy and how to invest
Rob Carrick: How robo-advisers compare on fees, returns and investing approaches
Robo-advisers are an ideal investment solution for people willing to pay a modest fee to have a portfolio of low-cost exchange-traded funds built to their requirements and then managed on a continuing basis, Rob Carrick writes. This version of the Robo-Adviser Guide is based on a close-up look at each firm’s growth portfolio, which would be of interest to someone comfortable having most of their assets invested in the stock market, who keeps their cool in market declines and who has at least 10 years to go until they need their money.
Evaluating robos on past returns alone is a mistake. Look at fees and an approach to portfolio building that makes sense to you. Some firms stick to broad stock and bond categories, while others add sub-sectors like long-term bonds and small-capitalization stocks.
More from Rob Carrick: Read this if you think hot stock markets mean savings accounts are for suckers
The super simple ETF solution for newbie investors
A reader asks John Heinzl whether exchange-traded funds are a good place for her daughter to start investing, and if so which ones?
He responds: Yes, I believe ETFs are a good choice because of their low costs and diversification. Since your daughter is new to investing, it’s best to keep things simple. I suggest you look into one of the newer all-in-one ETFs that provide exposure to a globally diversified portfolio of stocks and bonds with a single purchase. Vanguard Canada, Bank of Montreal and iShares all offer such “asset-allocation” ETFs.
For someone who will presumably be investing for many decades and can afford to take some risk, consider an ETF with a higher weighting of stocks than bonds, such as the Vanguard Growth ETF, BMO Growth ETF or iShares Core Growth ETF Portfolio. Read more here.
More from John Heinzl: Pfizer, Intertape Polymer and more investing stars and dogs for the week
Goldman just turned more bullish on stocks - and believes these sectors have the most to gain
Goldman Sach analysts are raising their forecasts for U.S. stocks, suggesting that better-than-expected third-quarter earnings and optimism around Pfizer’s COVID-19 vaccine trial will send the S&P 500 well into record-breaking territory by the end of the year, Mark Rendell writes.
In a note published this past week, a team of analysts said the S&P 500 could hit 3,700 points by year-end, up more than 3 per cent from current levels, and rise to 4,300 by the end of 2021. They recommend being overweight in information technology, health care, industrials and materials. Read more here.
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A retirement expert on low rates, when to start CPP and millennials in love with stock trading
Actuary Fred Vettese initially planned to update and broaden his message in the just-released second edition of his book, Retirement Income for Life: Getting More Without Saving More, Rob Carrick writes. The arrival of the pandemic late last winter gave him the opportunity to do something even more valuable. Vettese is among the first to produce a book on retirement planning that considers the pandemic’s effect on financial markets and the economy. Here’s an edited transcript of a Q&A session with him, including:
What do you say to the retirees who see high dividend yields as the answer to low bond and GIC rates?
That sounds totally rational, and it might actually work out. But I always hear alarm bells go off when everyone gets the same idea. Implicit in holding dividend stocks is the idea that those stocks are not going to suffer capital losses, that they’re not going to go down 20 or 30 per cent. And what if these companies start struggling and can’t keep up their earnings and have to cut their dividends? There’s a lot of risk in dividend stocks, even if we haven’t seen that risk showing its teeth yet.
What investors need to know for the week ahead
In the week ahead, Canadian inflation figures for October will be released Wednesday. Other economic data on tap include: Canada’s existing home sales, averages prices and MLS Home Price Index for October, as well as manufacturing sales and orders plus new motor vehicle sales for September (Monday); Canadian housing starts and U.S. retail sales for October, plus Canadian wholesale trade and U.S. business inventories for September (Tuesday); U.S. housing starts and building permits for October (Wednesday); U.S. existing home sales for October (Thursday); Canadian retail sales for September and new housing price index for October (Friday).
Companies releasing their latest financial results in the week ahead include George Weston, Walmart, Home Depot, Lowe’s, Target, TJX, Gap and Tyson Foods.