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Normally I wouldn’t concern myself with a single analyst upgrade of a stock, even if it’s Apple Inc. But BofA Securities recent research report is a different story. The analyst, Wamsi Mohan, began the report with, “We expect Apple to introduce an augmented reality/virtual reality headset, either by the end of 2022 or early 2023. We view this technology as a game-changer.”

Virtual reality headsets are a vital component of the metaverse, an immersive virtual existence in which consumers can interact, shop, play games, do their banking and eventually almost everything we do now in the real world.

As an investment theme, the metaverse has gotten a lot of attention in 2021 but by all accounts, a fully functioning virtual world is a long way off – a decade at least. That is the main reason I haven’t written about it - it’s too early to risk investment capital on related stocks.

An Apple VR headset might change that. While there are plenty of reasons to complain about Apple – the devices are expensive, they keep changing the charger attachments, the headphone jack disappeared, just to name three – we can still trust on the company to design sleek, attractive products that provide expansive functionality.

The release of an Apple VR headset would unleash a huge software developer community to begin building the metaverse. Tens of thousands of software engineers now creating apps for Apple operating systems would turn their attention to VR-related programming, accelerating the viability of a virtual world.

Mr. Mohan raised his rating on Apple from “neutral” to “buy”, and his 12-month price target from US$160 to US$210. The stock is currently about US$170. I don’t, however, intend this report to be a recommendation to buy the stock, at least not yet. I’m just reporting that the metaverse, with all its extensive socioeconomic and investment implications, may be upon us a lot sooner than we previously thought.

-- Scott Barlow, Globe and Mail market strategist

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Stocks to ponder

Suncor Energy Inc. (SU-T) In recent weeks the share price has come under significant pressure with the rapid spread of Omicron and fear of slowing global economic activity. This continued weakness in the share price may soon represent a buying opportunity, Jennifer Dowty says. Consider that the stock has 16 buy recommendations and an anticipated average one–year total return, including the 5.6-per-cent dividend yield, of 40 per cent.

The Rundown

As inflation heats up, this is the wrong way to hedge against it

Inflation is running at its hottest pace in decades and investors are scurrying for shelter. They should be careful where they turn. The problem with most inflation hedges is that they don’t really hedge. Supposed havens often have risks of their own. Ian McGugan explains.

Also see: After inflation, a bond supply shock may be next for markets

Dividend ETFs for investors who want max yield

A reader recently asked Rob Carrick about dividend ETFs that are based on shares with the highest dividend payouts. Here’s what he found. And if you’re more into dividend growth rather than just maximizing yields, check out John Heinzl’s review of how his model portfolio performed in 2021.

Narrowing market breadth may be worrying signal for stocks

Investors are scrutinizing the stock market’s narrowing breadth and other signs of ebbing risk appetite, as markets digest a hawkish pivot from the Federal Reserve, soaring inflation and concern over a fresh wave of COVID-19 cases. Only 31 per cent of stocks in the tech-heavy Nasdaq are trading above their 200-day simple moving average despite the index’s 18 per cent year-to-date gain, according to Refinitiv data Friday, the lowest level in at least a year. Saqib Iqbal Ahmed of Reuters reports.

Others (for subscribers)

Desjardins Securities reveals its top TSX stock picks for the new year

The most oversold and overbought stocks on the TSX

Monday’s analyst upgrades and downgrades

Monday’s Insider Report: Chair invests over $3.7-million in this stock with a forecast return exceeding 60%

Globe Advisor

Globe Advisor’s Best of 2021: Why investment funds still matter

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Ask Globe Investor

Question: What should I put in my TFSA?

Answer: I’ll tell you one thing I wouldn’t hold in my TFSA: a lot of cash. Cash earns next to no interest these days, so stuffing it into a TFSA defeats the account’s purpose, which is to avoid taxes on investment income. In general, you’re better off using your TFSA room for stocks, exchange-traded funds, mutual funds or fixed-income securities with higher yields so you can eliminate tax on the interest, dividends and capital gains. Now, if you have plenty of available TFSA room and don’t have to choose what goes in and what stays out, then by all means keep your low-yielding cash in there, too.

--John Heinzl

What’s up in the days ahead

Economist David Rosenberg, and BMO head market strategist Brian Belski, will provide their outlook for what the year ahead may bring.

Click here to see the Globe Investor earnings and economic news calendar.

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Compiled by Globe Investor Staff