Stephen Takacsy's Top Picks: March 29, 2022
BNN Bloomberg
Top picks from Stephen Takacsy, president, CEO and chief investment officer, Lester Asset Management
Stephen Takacsy, president, CEO and chief investment officer, Lester Asset Management FOCUS: Canadian stocks
MARKET OUTLOOK:
Volatility has increased significantly in capital markets due to a confluence of factors, not least is the recent invasion of Ukraine by Russia. The investment environment remains very foggy due to the ongoing effects of the pandemic, central banks increasing interest rates due to high inflation fueled by supply-demand imbalances, labour shortages and supply chain disruptions that have worsened as a result of the war in Ukraine.
We expect markets to remain volatile as central banks are caught between raising rates quickly to tame high inflation (and fearing a wage price spiral) while liquidity levels are still high and trying to engineer a “soft landing” to avoid a recession.
We believe that the rate of inflation will gradually ease while the economy simultaneously slows down. As a result, we are staying diversified by industry and company in recession-resistant businesses, such as CareRx, Pet Value, Jamieson Wellness and Park Lawn. At the same time, we are finding good long-term investment opportunities at attractive valuations in the non-resource small-mid cap sector, such as Pollard Banknote, Stella-Jones, and AG Growth.
