Stephen Takacsy's Top Picks: January 20, 2022
BNN Bloomberg
Top picks for Stephen Takacsy, president, CEO and chief investment officer, Lester Asset Management
MARKET OUTLOOK:
Volatility has increased in equity markets due to fears of the new Omicron variant and central banks increasing rates faster and more often than anticipated to fight nagging inflation fueled by supply chain disruptions and labour shortages.
Markets have been driven by easy money from low interest rates and momentum investing, with little regard for valuation, led by a narrow group of overbought large cap stocks.
The bubble that was forming in technology stocks has been partially deflated and is healthy since there was much froth in the market, however much risk remains in new asset classes like crypto currencies.
The TSX’s return over the past year has been almost entirely driven by energy and financials, driven by massive inflows into ETFs by foreign investors.
Money has been sucked out of other sectors creating great investment opportunities at compelling valuations such as in renewable energy, certain industrials, healthcare, and non-energy small cap stocks.
