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Patti Dolan of Wellington-Altus Private Wealth.Illustration by illustration Joel Kimmel

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Money manager Patti Dolan is anticipating better times ahead for investors, but not without some short-term pain.

We may see one more bump in [interest] rates in the short term but expect interest rates to decrease by the end of the year or early into 2024, which should stimulate the economy and benefit the markets,” says Ms. Dolan, a senior wealth advisor and portfolio manager at Wellington-Altus Private Wealth Inc. in Calgary, who oversees more than $300-million in assets.

She then expects a “choppy” recovery. “It will take time to recover from the latest economic shocks that drove inflation and interest rates higher.”

Ms. Dolan says her client portfolios remained resilient during the challenging markets of 2022. While she could not provide specific performance data, she notes her balanced model portfolio outperformed its benchmark in 2022.

The Globe and Mail spoke with Ms. Dolan recently about what she’s been buying and selling and the financial services stock she wished she had bought, which has since doubled.

Describe your investing style.

We focus on asset allocation, including equities and fixed income, which allows us to minimize risk while providing growth and income opportunities across asset classes and regions. Our fixed income includes bonds and high-interest savings accounts. For equities, we choose stocks based on criteria including dividend consistency and growth, sector diversification, market capitalization, liquidity and analyst coverage. (A stock needs more than four analysts covering the company).

We also screen for environmental, social, governance and Indigenous factors, so ESGI. The ‘I’ is an area that’s not often addressed, but we look for companies that focus on reconciliation and responsible investment initiatives.

What have you been buying or adding to your portfolios?

We are extending the duration of our bonds to three to five years. We’re seeing some incredible returns on those, particularly high-quality corporate bonds.

We have also been buying some utilities and oil and gas services companies. For utilities, we recently bought Atco Ltd. ACO-X-T and TransAlta Corp. TA-T. TransAlta struggled for a while as it converted its coal plants into natural gas and renewables, but it has done well with the transition. We like Atco because of the different facets of the company, not just utilities but also the water side of the business. We like utilities in general because they have strong dividends and are government-regulated, so they’re fairly predictable. Also, when the economy is improving, utility usage will increase, so we expect to see some growth in the future.

One energy infrastructure company we just picked up is Gibson Energy Inc. GEI-T. Gibson recently raised its yearly growth capital forecast and approved two new tanks at its Edmonton terminal. Gibson understands the responsible transition of energy. It has long-term financial and sustainability targets, such as net zero for 2050. It has also set short and long-term goals for workforce diversity, women, racial and ethnic and Indigenous representation.

What have you been selling?

In our U.S. portfolio, we have been trimming our positions in drug giant Merck & Co. Inc. MRK-N, Shell PLC SHEL-N and Marathon Petroleum Corp. MPC-N. We’ve had some excellent returns with those names recently, and while we think there’s more upside to them, we wanted to take some profits. We still own them in the portfolio.

In our Canadian portfolio, we sold our entire position in Suncor Energy Inc. SU-T at a profit, based on some negative ESG issues. We owned the stock for about three years. The company has had some environmental incidents leading to bad press. The company has a new chief executive officer, Rich Kruger, so we are stepping out for a bit to see what he brings to the table.

Name a stock you wished you bought or didn’t sell.

Intact Financial Corp. IFC-T is a stock we looked at when it was trading at around $100 in 2017. I was impressed by its sustainability practices, but financial analysts had a negative outlook on the company due to a lot of natural disasters that had just taken place. There was some skepticism on how the company could get through that. It turned out that it did really well. It’s a very resilient company and has been very profitable. So, we missed the boat on that one. We’re looking at it again, but it’s currently out of our price range.

What advice do you have for new investors?

Don’t get your financial advice from social media. Instead, work with a professional, set up a financial plan and stick to it. Also, focus on the long-term, not the short-term hype, and you’ll do well.

This interview has been edited and condensed.

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