David Burrows' Top Picks: March 7, 2022
BNN Bloomberg
Top picks from David Burrows, president and chief investment strategist, Barometer Capital Management
MARKET OUTLOOK:
The investment team continues to believe that inflation is investors’ greatest current risk and that portfolios need to be positioned both to protect against erosion of purchasing power and also to take advantage of the fact that in general, consensus investor positioning continues to be too defensive and negatively impacted by rising rates.
At this point cash is not a good option given its ongoing loss of purchasing power. Commodities entered the current period of conflict having already entered a structural or secular bull market after many years of under-investment. North and South America both offer ample investment opportunities and remain furthest from the conflict.
Large proportions of the major U.S. indices continue to be made up of tech, consumer and healthcare, most of which is negatively impacted by rising rates and inflation. Much smaller parts of the major indices such as energy, materials and financials are better suited to the current environment for both appreciation and dividend growth.
In the case of energy and materials, an already tight supply-constrained market has had the added boost in supply/demand dynamics driven by the war in the Ukraine. Pricing power in these groups is likely to remain in place in at least the intermediate term.
TOP PICKS:
