Micheal Sprung's Top Picks: February 1, 2022
BNN Bloomberg
Top picks from Michael Sprung, president, Sprung Investment Management
MARKET OUTLOOK:
So far in 2022, the global markets are off to a rocky start. Concerns regarding the pandemic appear to be giving way to fears of geopolitical instability in Ukraine, Taiwan and elsewhere, as well as inflationary pressures in the world economies.
The omen of higher interest rates is having a profound impact on the capital markets as investors attempt to gauge the timing and extent to which central banks will act to increase the rates. The prospect of higher rates is having the greatest effect on securities where earnings growth is farther in the future.
This rotation away from growth securities is a major change to the principal driver of the market gains over the past number of years. As a result, we expect that more investments will be directed to securities with more immediate earnings prospects, stronger balance sheets and more secure dividend policies.
TOP PICKS:
Bank of Nova Scotia (BNS TSX) Last bought March 2020 for $54.90 The Bank of Nova Scotia is attractively valued trading at a modest discount to its peers on a relative basis. Management has been very conservative in their provisioning for loan losses during the pandemic which may lead to positive surprises as economic conditions improve.
